Yen traders are on heightened alert for possible intervention around the Bank of Japan’s upcoming policy meeting, with a three-day holiday following the decision offering authorities an opportunity to act in thinner trading. The yen gained as much as 0.7% to 157.63 on Thursday as traders started pricing in a bigger than 25 basis point rate hike at the next BOJ meeting. It also rallied as much as 1.2% during New York hours on Wednesday, underscoring market jitters ahead of the BOJ’s Sept. 18 policy decision, when the central bank is widely expected to raise rates.

The yen’s recent gains reflect growing anticipation of tighter monetary policy and potential action by Japanese authorities during the holiday window, when lower liquidity could amplify the impact of any intervention. Traders are closely watching for signs of coordinated moves to support the currency amid concerns over excessive volatility and speculative positioning.