The Japanese Yen (JPY) loses ground against its American counterpart for the second consecutive day on Tuesday and lifts the USD/JPY pair to over a one-week high, above mid-151.00s during the Asian session on Tuesday.
The uncertainty over how soon the Bank of Japan (BoJ) could raise interest rates again keeps the JPY bulls on the defensive. Furthermore, the overnight bounce in the US Treasury bond yields from October lows undermines the lower-yielding JPY.
Apart from this, the post-NFP US Dollar (USD) recovery from a nearly one-month trough, bolstered by expectations for a less dovish Federal Reserve (Fed), acts as a tailwind for the currency pair.
That said, a softer risk tone, concerns that US President-elect Donald Trump's tariff plans could trigger a second wave of global trade wars and geopolitical tensions help limit deeper losses for the safe-haven JPY.
Traders might also refrain from placing aggressive bullish bets around the USD/JPY pair and opt to wait for the release of the latest US consumer inflation figures, due on Wednesday.
The crucial US Consumer Price Index (CPI) report will be looked upon for fresh cues about the Fed's rate-cut path. This, in turn, will drive the USD demand and provide some meaningful impetus to the currency pair ahead of the key central bank event risks next week.
Source: FXStreet
