The yen is prone to sharp fluctuations and further weakening in the coming week. Japan is about to enter a three-day holiday, and market liquidity will decrease; at the same time, the Bank of Japan did not give more clear guidelines on the pace of subsequent interest rate hikes, which disappointed investors. The yen exchange rate stabilized around 156.86 yen against the dollar on Monday. The yen plummeted 1.3% last Friday, when two Bank of Japan governors opposed interest rate hikes. There was subsequent news that officials called market participants to carry out exchange rate checks. This was a precursor to potential foreign exchange market intervention in buying yen, but the news only narrowed the yen's decline slightly. The yen depreciated by more than 2% last week, the biggest weekly decline in nearly a year. “Similar to the recent strong rise of the yen before the central bank meeting, the Bank of Japan has completely contained its momentum,” James Reilly, senior market economist at Capital Economics, wrote in a report. “Arguably, the significant improvement in the yen's trend against the US dollar will depend on factors on the US side.” The exchange rate inspection news that came out this time also highlights that the Japanese authorities may once again enter the market to prevent the yen from weakening. Once they intervene, the exchange rate will fluctuate rapidly and drastically, causing traders to suffer losses. Japan's holiday, which lasts until Wednesday, will cause insufficient market liquidity. If the government intervenes, the effects of the intervention will be amplified. A similar situation occurred during the Golden Week holiday from the end of April to the beginning of May this year. At that time, after the yen fell below the 160 mark, Japan intervened in the foreign exchange market.

The yen is prone to sharp fluctuations and further weakening in the coming week. Japan is about to enter a three-day holiday, and market liquidity will decrease; at the same time, the Bank of Japan did not give more clear guidelines on the pace of subsequent interest rate hikes, which disappointed investors. The yen exchange rate stabilized around 156.86 yen against the dollar on Monday. The yen plummeted 1.3% last Friday, when two Bank of Japan governors opposed interest rate hikes. There was subsequent news that officials called market participants to carry out exchange rate checks. This was a precursor to potential foreign exchange market intervention in buying yen, but the news only narrowed the yen's decline slightly. The yen depreciated by more than 2% last week, the biggest weekly decline in nearly a year. “Similar to the recent strong rise of the yen before the central bank meeting, the Bank of Japan has completely contained its momentum,” James Reilly, senior market economist at Capital Economics, wrote in a report. “Arguably, the significant improvement in the yen's trend against the US dollar will depend on factors on the US side.” The exchange rate inspection news that came out this time also highlights that the Japanese authorities may once again enter the market to prevent the yen from weakening. Once they intervene, the exchange rate will fluctuate rapidly and drastically, causing traders to suffer losses. Japan's holiday, which lasts until Wednesday, will cause insufficient market liquidity. If the government intervenes, the effects of the intervention will be amplified. A similar situation occurred during the Golden Week holiday from the end of April to the beginning of May this year. At that time, after the yen fell below the 160 mark, Japan intervened in the foreign exchange market.