There seems to be Hyphenation support but not on by default. (I downloaded and tried.)
regulation the circulation.
Bad typography is my main quibble with the Kindle app. It's been awful for years.Have you looked into a better flow algorithm, such as the Knuth/Plass [1] algorithm from TeX?
[1] http://onlinelibrary.wiley.com/doi/10.1002/spe.4380111102/ab...