JThe Japanese yen rose in the Asian market on Monday against a basket of major and minor currencies, resuming gains that had briefly paused in the previous session against the U.S. dollar. The currency moved closer to a two-month high amid growing speculation of a Bank of Japan intervention in the foreign exchange market, capitalizing on lower liquidity during Japan's Golden Week holidays.

As inflationary pressures on BoJ monetary policymakers recede, the likelihood of a Japanese interest rate hike in June has declined, as the market awaits more data on the developments of the world's fourth-largest economy.

Price Overview

* Japanese Yen Exchange Rate Today: The dollar fell against the yen by about 0.7% to (156.95), from Friday's closing price of (157.02), after recording a session high of (157.25).

* The yen ended Friday's trading down by approximately 0.3% against the dollar due to correction and profit-taking operations, after having hit a two-month high of 155.49 yen earlier in the session.

* Last week, the yen achieved a gain of about 1.45% against the dollar, marking its fourth weekly rise in five weeks and its largest weekly gain since late February, driven by BoJ intervention in the exchange market.

Japanese Monetary Authorities

Officials in Tokyo have refrained from confirming whether they have actually intervened in the exchange market to support the local currency. However, sources told Reuters that Japanese monetary authorities have indeed conducted yen-buying operations for the first time in two years.

Japan's top currency diplomat, Atsushi Mimura, stated on Friday that speculation remains widespread, issuing an explicit warning that Tokyo is prepared to return to the markets just hours after intervening to support the struggling yen.

Responding to a question about the possibility of Tokyo's intervention in the currency market, Mimura told reporters: "I will not comment on what we will do in the future. But I assure you that the Golden Week holiday in Japan has only just begun."

Opinions and Analysis

* Mahjabeen Zaman, head of FX research at ANZ Bank in Sydney, stated: "The primary focus will be on whether additional intervention will occur, especially with Japan closed for the Golden Week holiday, which leads to lower liquidity during this period."

* Zaman added: "More importantly, is whether the United States will join Japan's efforts to support the yen. If yen weakness persists, it can be argued that the chances of bilateral intervention will increase."

Japanese Interest Rates

* Data from last week showed that core inflation in Tokyo slowed, contrary to market expectations for April.

* Following that data, the market pricing for the probability of the BoJ raising interest rates by a quarter-point in the June meeting fell from 75% to 65%.

* To re-evaluate these probabilities, investors are awaiting further data on inflation, unemployment, and wage levels in Japan.

* BoJ Governor Kazuo Ueda stated last week that there is no immediate need to raise interest rates.

* The BoJ kept interest rates unchanged last week for the third consecutive meeting, warning of escalating inflationary pressures due to the repercussions of the war with Iran and high energy prices.

* The vote to hold rates passed with 6 members in favor and 3 members calling for a 25-basis-point hike to the 1.0% range.