Ella 
The Japanese yen (JPY) extended gains for a second straight session on Tuesday, which could be attributed to rising risk aversion. Traders are assessing the Bank of Japan’s interest rate decision next week, which could see a rate hike to support the yen.
Toshimitsu Motegi, a senior ruling party official, urged the Bank of Japan (BoJ) to more clearly communicate plans to normalize monetary policy through gradual rate hikes, emphasizing that excessive yen depreciation is having an adverse impact on the economy, according to Reuters. Japanese Prime Minister Fumio Kishida added that the central bank’s monetary policy normalization would support Japan’s transition to a growth-driven economy.
The USD/JPY pair faced challenges as the U.S. dollar (USD) struggled amid increased bets on a September rate cut by the Federal Reserve (Fed). Fed Chairman Powell noted that he was increasingly hopeful about the progress made on inflation in recent months. Meanwhile, Fed Governor Christopher Waller said the time to cut the policy rate was getting closer.
