Anna 
The Japanese Yen (JPY) is encountering challenges to extend its modest intraday gains, marking its second consecutive day of decline against its American counterpart on Tuesday. Despite this, the JPY manages to stay above the weekly low established in the previous session. The Bank of Japan (BoJ) Governor Kazuo Ueda’s dovish comments in the overnight session have tempered expectations for an early interest rate hike, while the prevailing strong bullish sentiment in global equity markets acts as a hindrance for the safe-haven JPY. Although the downside appears limited, there are anticipations of an imminent shift in the BoJ’s policy stance.
Reports on the outcome of Japan’s spring wage negotiations indicate that most firms have acceded to the trade unions’ wage rise demands. This development, coupled with speculation about a potential March interest rate hike by the BoJ and ongoing geopolitical tensions, may deter traders from taking bearish positions on the JPY.
Additionally, the relatively subdued performance of the US Dollar (USD), driven by uncertainty surrounding the Federal Reserve’s (Fed) rate-cut trajectory, contributes to capping the USD/JPY pair. Traders are likely exercising caution and may prefer to await next week’s significant central bank events – the BoJ decision on Tuesday, followed by the Fed policy update on Wednesday.
