The Japanese Yen continues with its struggle to gain any meaningful traction on Tuesday.
Intervention fears lend some support, while the BoJ policy uncertainty acts as a headwind.
Traders look forward to the BoJ core CPI for a fresh impetus ahead of the US macro data.
The Japanese Yen (JPY) extends its sideways consolidative price move during the Asian session on Tuesday and remains well within the striking distance of the YTD low against its American counterpart. The overnight comments by Japan's vice-finance minister for international affairs, Masato Kanda fuelled speculations that authorities are prepared to take appropriate action and about to use market operations to prop up the domestic currency. This turns out to be a key factor lending some support to the JPY and acting as a headwind for the USD/JPY pair.
That said, the uncertainty over the Bank of Japan's (BoJ) future policy steps is holding back the JPY bulls from placing aggressive bets. The US Dollar (USD), on the other hand, continues to draw support from the optimism around the US economic growth, which might force the Federal Reserve (Fed) to keep interest rates higher for longer. This, in turn, should help limit any corrective decline for the USD/JPY pair ahead of the BoJ Core CPI later today and the US Personal Consumption Expenditures (PCE) Price Index data, scheduled for release on Friday.
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