TOKYO--Japan didn't step into foreign-exchange markets last month, as repeated verbal warnings and historic intervention during the summer helped the yen regain some strength.

The country didn't conduct any currency operations between Aug. 27 and Sept. 28, according to data released by the Ministry of Finance on Wednesday.

The inaction follows a record $98.7 billion operation the prior month involving coordination with Washington to defend the Japanese currency after it weakened to 40-year lows near 164 to the dollar in late July. That intervention was the first time since 1998 that Tokyo moved in lockstep with the U.S. Treasury to buy the yen.

A series of comments from Japanese officials, remarks from Treasury Secretary Scott Bessent and expectations for faster interest-rate hikes by the Bank of Japan have combined to cap the yen's depreciation.

"Generally speaking, we view the yen's undervaluation as problematic," Japan's Finance Minister Satsuki Katayama said Tuesday.

Katayama has repeatedly reaffirmed that Tokyo is working closely with the U.S. to ensure stability in the foreign-exchange market, reinforcing views that Japan is ready to intervene again as needed.

The Japanese currency last stood at 156.93 against the dollar after strengthening as much as 152.90 in early September.

Following a rate hike earlier this month, many economists and investors expect the BOJ to tighten policy once more by the end of the year to combat persistent inflation, which is exaggerated by a weaker yen.

That has brightened analysts' outlook on the yen, as a narrowing rate gap with the U.S. would diminish its appeal as a funding currency in carry trades, where investors borrow in yen to invest in higher-yielding assets.

Still, the rebound has been shaky so far as markets keep repricing rate paths in both Japan and the U.S.

Sticky inflation in the U.S. and strong economic growth also back the case for more tightening by the Federal Reserve, which also delivered a rate hike in September. But comments from Fed President John Williams saying there is no rush to raise again have tempered hawkish views.

Traders could also be overestimating the BOJ's hawkish tilt.

Analysts at Maybank don't think there has been enough of a shift in the BOJ's stance to expect a pace of tightening that beats market expectations.

"There are no recent signs from the BOJ that they see an economy that would grow extremely strongly nor of a substantial inflation overshoot that could guide a much more aggressive pace of hike than once per quarter," the analysts wrote in a note.

BOJ Gov. Kazuo Ueda has expressed concerns about the impact of rapid policy tightening, underlining the need for gradual adjustments.

And even as the BOJ hikes, so too are other major central banks like the European Central Bank and the Bank of England.

"BOJ rates remain well behind the rest, implying the need for a more aggressive stance to reduce the carry unfavorability for the yen," Maybank said.