A buildup in speculative bets against the yen before Japan's latest intervention may amplify the currency's rebound if traders unwind those positions, analysts say.

The Bank of Japan and Ministry of Finance intervened in the foreign exchange market this week to support the yen, which has been under pressure amid rising US yields and a strengthening dollar.

Analysts note that speculative short yen positions reached multi-month highs heading into the intervention, creating the potential for a sharp rebound if hedge funds and other large traders rush to close those bets.

The yen has weakened roughly 10% against the dollar since the start of the year, despite repeated warnings from Japanese authorities about the impact of excessive volatility on the economy.

Market participants are now watching closely for signs of further intervention or policy adjustments that could stabilize the yen and influence the trajectory of global currency markets.