Yen strengthens as traders monitor for further intervention clues and Bank of Japan's balance sheet strategy.

The yen has seen recent volatility, with hedge funds significantly cutting bearish bets after joint yen-buying operations by Japan and the U.S. helped stabilize the currency. While the Bank of Japan maintained its benchmark rate last week, there's a 60% implied chance of a rate hike by September. The BoJ has also decided to slow its balance-sheet reductions to prevent disorderly rate rises, amidst concerns over rising debt-servicing costs for Japan, which have reached 31 trillion yen in fiscal 2026.