Yen vulnerable with Japan on holiday after BOJ disappoints

The yen is vulnerable to sharp moves and further declines over the next week, with a three-day holiday in Japan set to reduce trading liquidity and investors disappointed that the central bank didn’t offer stronger guidance on the pace of future interest rate hikes. The yen steadied around ¥156.86 per dollar Monday after falling as much as 1.3% Friday, when two Bank of Japan board members dissented from a rate hike. A later report that officials had called market participants for a rate check, a prelude to potential currency purchases, only pared losses.

The yen fell more than 2% last week, its biggest weekly decline in almost a year.