The Japanese yen rose in Asian trade on Tuesday against a basket of major rivals away from six-week lows against the US dollar on active short-covering.

The recovery is underpinned by the losses in US 10-year treasury yields before major inflation data for April, which could provide crucial clues on the path ahead for Fed interest rates.

The Price

The USD/JPY price fell 0.5% today to 147.75, with a session-high at 148.45.

The yen tumbled 2.15% against the dollar on Monday, the third loss in four sessions, and the heftiest since March 2020, plumbing six-week lows at 148.65.

Its the worst such loss in five years as haven demand tumbles while investors welcome a preliminary US-China trade deal.

Japanese Rates

The Bank of Japan Governor Kazuo Ueda said the timing of achieving the 2% inflation target could be delayed.

The markets estimate a 25% chance for a BOJ 0.25% interest rate cut in June.

Now traders await Japanese inflation, unemployment, and wages data later this week to gather more clues.

US Yields

US 10-year treasury yields fell over 0.5% on Tuesday and gave up a four-week high at 4.479%, on track for the first loss in four sessions, hurting the greenback.

Fed official Adriana Kugler said that Trumps trade policies will likely raise inflation and impact growth negatively, despite the latest tariff pause.

Cleveland Fed President Beth Hammock said the Fed requires more time to assess the impact of Trumps tariffs before deciding on the suitable response.

According to the Fedwatch tool, the odds of a 0.25% Fed rate cut in June stand at just 12%, with traders now waiting for major April inflation data for the US to gather more clues.

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