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