The U.S. dollar fell against the Japanese yen during Fridays trading, just one day after a widespread belief that authorities in Tokyo intervened to support the currency.

The dollar declined by as much as 0.66% to hit a session low of 155.60 yen, compared to 157.12 yen earlier in the day.

The yen had surged by approximately 3% on Thursday following steady flows of official buying believed to have pushed the dollar down to 155.5 yen from around 158.3 within an hour. Reports, including from Reuters, described the move as an intervention by Japanese officials.

While the immediate cause for Fridays movements was not entirely clear, analysts pointed out that markets have entered a state of anticipation and caution following Thursdays events, bracing for any sudden currency shifts.

Japan's top currency diplomat, Atsushi Mimura, stated earlier on Friday that speculation remains high, issuing an explicit warning that authorities are prepared to return to the market only hours after intervening to support the yen, which has lost about 5% of its value over the past three months.

The Japanese Ministry of Finance could not be reached for immediate comment.

Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets, said: "Liquidity is thin and investors are on edge after yesterdays moves, making the market more susceptible to volatility in the USD/JPY pair."

He added: "Every time we see a significant move in the yen, questions will arise regarding the cause, especially in light of recent warnings."

This comes at a time when the significant interest rate differential between the United States and Japan, combined with expectations of lower trading volumes ahead of the holiday period, remains a major concern for authorities regarding potential sharp speculative attacks on the currency.