The Japanese yen strengthened to a one-month high against the dollar, amid chatter that authorities could again intervene in foreign-exchange markets.

A sharp appreciation of the yen in New York trade on Wednesday sparked some speculation that Japanese authorities checked on currency rates, a move considered to be a sign or warning that they are on the verge of intervention.

Those gains continued into the Asian session on Thursday as the yen hit its strongest intraday levels since Aug. 3. The dollar was last down 1.0% at 157.14 yen after falling as low as 156.34 yen earlier.

The yen was helped by growing expectations that the Bank of Japan will turn more hawkish at its policy meeting later this month.

BOJ board member Hajime Takata on Wednesday said that rate increases should be "conducted in a nimble and data-dependent manner in response to the domestic price and economic environment, particularly reflecting overseas trends."

His comments suggested that it couldn't be assumed that tightening would continue at the roughly twice-yearly pace seen so far, according to Ipek Ozkardeskaya, a senior analyst at Swissquote.

Markets have largely priced in a 25-basis-point hike from the central bank later this month, but Ozkardeskaya said that some are now betting "that the BOJ could potentially announce a jumbo hike to stop the bleeding in the Japanese yen."

Tighter monetary policy in Japan could narrow the gap between Japanese and U.S. interest rates, which would diminish the appeal of the yen as a funding currency for the so-called "carry trade," where proceeds from cheap yen loans are sold for other currencies to be invested in higher-yielding assets abroad.

An unwinding of these trades would fuel demand for the yen to repay those loans and help strengthen the currency.

Still, MUFG's Derek Halpenny cautioned that a hike this month would only confirm an acceleration in tightening to every three months from every six months, and there is scope for the BOJ to pick up the pace further before considering outsized moves.

Adding to the pressure, Treasury Secretary Scott Bessent has called on Japan to move away from its reflationary policies, referring the country's past monetary easing and aggressive fiscal spending.

Those comments have reinforced expectations that the BOJ will accelerate the pace at which it raises rates, OCBC strategists said.

Meanwhile, weak U.S. data this week and dovish comments from a Fed official have lowered expectations for an immediate interest rate increase this month and further reinforced the downside momentum of the dollar against yen.

Investor concerns about potential intervention may also be heightened given the Labor Day holiday in the U.S. on Monday, when foreign-exchange intervention could have an outsized impact given thin trading volumes.