Yen weakens after intervention-led surge ahead of BOJ policy decision

The dollar gained by as much as 0.45% to 160.175 in early trades, after diving 2.4% in its biggest single-day drop since January 2023 in the previous session.

Japan conducted yen-buying, dollar-selling market intervention in New York session overnight, a market source told Reuters, pulling the sagging currency from four-decade lows.

The BOJ is widely expected to keep short-term interest rates steady at 1%, having just hiked in June, while delivering a hawkish signal as price pressures mount.

That follows U.S. Federal Reserve's decision to leave interest rates unchanged, which bruised the dollar as traders questioned whether the Fed's new chief was serious about containing inflation.

The U.S. dollar index, which tracks the currency against six major peers, was little changed at 100.6 after plunging 0.7% in the previous session. It was heading for a 1.5% drop for the week and a 1.2% loss for the month.

The euro stood at $1.1523, down 0.04% so far in Asia, after climbing to a six-week high in previous session. Sterling traded flat at $1.34605.

The Aussie and Kiwi dollar were roughly down 0.1%, last at $0.70245 and $0.5875, respectively.

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