Ella 
The yen struggled to gain significant momentum in Asia on Tuesday, hovering near the 34-year low hit the previous day. The Bank of Japan will place less emphasis on inflation in favor of a more liberal approach when setting monetary policy, a report showed on Monday. At the same time, Bank of Japan Governor Ueda Kazuo said that after ending the negative interest rate policy in March, the central bank will resume normal monetary policy and let Japan’s various economic data guide the path of future interest rate increases. This adds to the Bank of Japan’s uncertain outlook on future interest rate hikes and continues to weigh on the yen.
Separately, markets pushed down expectations for a first interest rate cut from the Federal Reserve (Fed) after U.S. consumer inflation data for March came in higher than expected. This shows that the huge interest rate gap between Japan and the United States will continue for some time. Coupled with the bullishness of the US dollar, the trend of USD/JPY will be affected by this. Meanwhile, recent frequent warnings from Japanese authorities and a more muted risk tone could help limit losses in the safe-haven yen. Therefore, this may prevent traders from placing new bullish bets on USD/JPY amid overbought technical indicators on the daily chart.
