The yen fell into the 157 range as the BOJ's cautious stance and the Japan-US interest-rate gap weighed on the currency. The market is focused on the course of monetary policy and the possibility of intervention.
The yen fell to ¥157.47 per dollar at one point, while trading was limited by the Bank of Japan being closed for a holiday and concerns about intervention. Although the BOJ raised interest rates last week, divided views created caution in the market.
The US Federal Reserve implemented a 0.25-percentage-point rate hike, and expectations are spreading that several countries will raise rates further by year-end as other major central banks adopt hawkish-leaning stances.
Statements from the central banks of Australia and New Zealand have fueled expectations that rate hikes could come as early as next week, affecting movements in the related currencies.
The yen's future direction is expected to depend on whether the BOJ accelerates the pace of rate hikes and on whether the government takes a stronger stance toward foreign-exchange intervention.