FX.co ★ Japanese Yen Eases After Two-Day Rise

The Japanese yen weakened towards 144 per dollar on Tuesday, reversing a two-day winning streak as the U.S. dollar gained strength amidst optimism regarding U.S.-China trade discussions, against a backdrop of investor caution leading up to the Federal Reserve's forthcoming policy meeting. Despite U.S. President Donald Trump's statement that he has no current plans to speak with Chinese President Xi Jinping this week, he suggested a potential reduction in the existing 145% tariff rate on Chinese imports, adding complexity to the tense trade environment. Additionally, investors are closely monitoring the results of recent U.S.-Japan bilateral trade talks, with Tokyo eager to finalize an agreement by June. On the monetary policy front, the Bank of Japan maintained its benchmark interest rate at 0.5% last week, aligning with expectations. However, the central bank lowered its growth and inflation forecasts, solidifying market predictions that any rate hikes are unlikely in the near term. Trading volumes are anticipated to be low on Tuesday due to a public holiday in Japan.