The yen surged against the dollar on Friday, just hours after Tokyo authorities were widely believed to have stepped in to support the currency.
The dollar fell as much as 0.66%, hitting a session low of 155.60 yen, down sharply from 157.12. This follows Thursday's dramatic 3% rally, which sources say was driven by a steady stream of official buying that pushed the dollar from around 158.3 to 155.5 in less than an hour.
Friday's move was less clear, but analysts say the market is on edge. Japan's top currency diplomat Atsushi Mimura warned speculation remains rife, signaling officials are ready to intervene again. The Ministry of Finance had no immediate comment.
The wide gap between U.S. and Japanese interest rates, combined with lower trading volumes ahead of holidays, has left Tokyo wary of aggressive speculative attacks. The yen has lost about 5% over the past three months.