The yen is likely to fluctuate sharply and fall further in the coming week. Japan's three-day holiday will reduce transaction liquidity, and investors are disappointed that the Bank of Japan has not provided more clear guidance on the pace of future interest rate hikes. On Monday, the exchange rate of the yen remained stable at around 156.86 against the US dollar. It fell 1.3% last Friday because two members of the Bank of Japan voted against the interest rate hike. Afterwards, there were reports that officials called market participants to inquire about exchange rates. This move is generally regarded as a precursor to official intervention, but the yen only narrowed the decline. The yen had a cumulative decline of more than 2% last week, the biggest weekly decline in nearly a year. “Just as the yen was mostly strong before the Bank of Japan meeting recently, the Bank of Japan has once again stifled its gains,” James Reilly, senior market economist at KITU Macro, wrote in a report. “It seems fair to say that whether the yen can see a substantial recovery against the US dollar depends on the US side.”

The yen is likely to fluctuate sharply and fall further in the coming week. Japan's three-day holiday will reduce transaction liquidity, and investors are disappointed that the Bank of Japan has not provided more clear guidance on the pace of future interest rate hikes. On Monday, the exchange rate of the yen remained stable at around 156.86 against the US dollar. It fell 1.3% last Friday because two members of the Bank of Japan voted against the interest rate hike. Afterwards, there were reports that officials called market participants to inquire about exchange rates. This move is generally regarded as a precursor to official intervention, but the yen only narrowed the decline. The yen had a cumulative decline of more than 2% last week, the biggest weekly decline in nearly a year. “Just as the yen was mostly strong before the Bank of Japan meeting recently, the Bank of Japan has once again stifled its gains,” James Reilly, senior market economist at KITU Macro, wrote in a report. “It seems fair to say that whether the yen can see a substantial recovery against the US dollar depends on the US side.”