The Japanese Yen (JPY) languishes near a six-month low against its American counterpart and seems vulnerable to prolonging a one-month-old downtrend amid uncertainty about the timing of the next rate hike by the Bank of Japan (BoJ). Adding to this, the recent widening of the US-Japan yield differential, bolstered by reduced bets for further rate cuts by the Federal Reserve (Fed), validates the near-term negative outlook for the lower-yielding JPY. That said, a combination of factors might hold back the JPY bears from placing fresh bets.

Japan's Finance Minister Katsunobu Kato weighed in with some verbal intervention on Tuesday. This, along with concerns about US President-elect Donald Trump's tariff plans, geopolitical risks and the cautious market mood, could offer some support to the safe-haven JPY. Investors might also prefer to wait for the release of the FOMC meeting Minutes. In the meantime, the Fed's hawkish outlook remains supportive of the underlying US Dollar (USD) bullish tone, which assists the USD/JPY pair to hold steady above the 158.00 mark.(Cay) Newsmaker23

Source: Fxstreet