The Japanese yen fell in Asian trading on Tuesday against a basket of major and minor currencies, giving up its two-week high against the US dollar and heading for its first loss in four sessions, as profit-taking and corrective moves picked up.

Japans finance minister reaffirmed there is no divergence between the government and the Bank of Japan regarding their assessment of the economy, which she described as modest but showing signs of gradual improvement.

Price overview

USD/JPY today: The dollar rose 0.25% to 155.78 from an opening level of 155.41, after touching an intraday low of 155.40.

The yen ended Monday up 0.45% against the dollar its third straight daily gain reaching a two-week high at 154.66 following more hawkish comments from the Bank of Japan governor.

Finance minister comments

At a regular press conference on Tuesday, Finance Minister Satsuki Katayama said, in response to questions about Governor Kazuo Uedas recent remarks: We do not believe there is any contradiction between the governments view and the Bank of Japans view regarding the modest recovery of the economy, so we do not see this as a problem.

BOJ Governor Ueda said on Monday that the central bank will examine the pros and cons of raising interest rates at its December policy meeting the strongest indication yet that a hike this month is possible.

Katayama added that she expects the BOJ to continue close coordination with the government and to maintain a policy stance aimed at sustainably achieving the 2% inflation target, aligned with clear wage growth.

Japanese interest rates

Sources told Reuters the Bank of Japan is preparing markets for a potential rate hike in December, reviving its earlier hawkish tone as concerns resurface over the yens sharp depreciation and as political pressure to keep rates low fades.

Following Uedas remarks on Monday, market pricing for a 25-basis-point BOJ hike in December rose from 40% to around 60%.

Investors now await further data on inflation, unemployment, and wage growth in Japan to reassess these probabilities.