Ella 
The yen extended gains for a second straight session on Tuesday, which could be attributed to rising risk aversion. Traders assessed the Bank of Japan (BoJ)’s interest rate decision next week, which could see the central bank raise rates to boost the yen.
Senior ruling party official Toshimitsu Motegi urged the Bank of Japan to more clearly communicate its plans to normalize monetary policy through gradual rate hikes, emphasizing that excessive yen weakness has had 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 U.S. dollar (USD) struggled as market bets on a September rate cut by the Federal Reserve (FED) continued to rise, with USD/JPY facing challenges. Fed Chairman Powell noted growing hope for progress in tackling inflation in recent months. Meanwhile, Fed Governor Christopher Waller said the time for a policy rate cut was getting closer.
