FX.co ★ Japanese Yen Gains as Dollar Weakens

The yen appreciated towards 147 per dollar on Tuesday, continuing its upward trajectory for a second consecutive session as the dollar softened in anticipation of a forthcoming Federal Reserve interest rate cut. Markets are almost entirely anticipating a reduction of 25 basis points this week, with a cumulative easing of 67 basis points projected for the year. This outlook has been supported by data indicating a cooling U.S. labor market and persistently low inflation. Meanwhile, the Bank of Japan is set to establish its monetary policy this week, with expectations of maintaining the current interest rate at 0.5% as officials evaluate the repercussions of U.S. tariffs on Japan's export-reliant economy. Traders are also anticipating new economic data, with forecasts suggesting continued weakness in exports and imports, and a slowdown in core CPI to 2.7%, marking the lowest level since November 2024.