The yen started in 2023 with modest gains Monday, as traders weighed the risk of further technical strength amid thin holiday trading.
In early Tokyo trading, the Japanese currency climbed by as much as 0.3% to 130.77 per dollar. A close below the dollar-yen's August low of 130.41 would open the door for further declines in the pair, according to chart watchers.
Some Asia-based FX traders familiar with the transactions said that they opened small short-dollar positions because they were not authorized to speak publicly, because they were aware of the possibility of a break in the absence of normal market liquidity.
The yen has climbed some 16% from its October nadir amid government intervention, hopes for a slowing of US rate hikes and speculation about the possibility of a policy shift from the Bank of Japan this year. Many believe that the BOJ's decision to tweak its yield curve control parameters in December is a sign that its monetary policy might soon be coming to an end.