The Japanese yen fell in Asian trading on Tuesday against a basket of major and minor currencies, extending its losses for a third consecutive session against the US dollar, as the likelihood of the Bank of Japan raising interest rates later this month weakened.

Easing inflationary pressures on the central bank have reduced expectations for near-term policy normalization, with investors awaiting further evidence on the future path of interest rates in the worlds fourth-largest economy.

Price Overview

Yen exchange rate today: the dollar rose against the yen by about 0.4% to 147.73, from the opening level of 147.17, after recording a low at 147.05.

The yen ended Mondays session down 0.1% versus the dollar, marking a second straight daily decline.

US Dollar

The US dollar index rose on Tuesday by around 0.2%, heading toward its first gain in six sessions, rebounding from a five-week low at 97.54 points, reflecting renewed strength of the greenback against a basket of global currencies.

In addition to bargain buying from lower levels, the rebound in the US dollar comes ahead of a series of key US labor market data, which will provide critical clues on the likelihood of a Federal Reserve rate cut at its September meeting.

Japanese Interest Rates

Bank of Japan board member Nakagawa warned of trade policy risks and pointed to the upcoming Tankan report as guidance on the path of policy normalization.

Recent price data in Japan shows waning inflationary pressures on the central banks policymakers.

Market pricing for a 25-basis-point rate hike at the September BoJ meeting is currently steady at 35%.

To reprice these expectations, investors are awaiting additional data on inflation, unemployment, and wages in Japan, along with comments from BoJ officials.