Ella 
The yen hit a one-week low against the dollar on Monday, pushing further away from those lows on expectations that Japan’s political landscape may make it difficult for the Bank of Japan to raise interest rates further. Still, Bank of Japan Governor Kazuo Ueda’s comments at a post-meeting press conference last week left open the possibility of a rate hike at the BOJ’s next policy meeting in December. On top of this, market jitters ahead of the tense U.S. presidential election and geopolitical risks provided some support to the safe-haven yen.
Additionally, a tighter U.S.-Japan interest rate differential helped limit the yen’s losses, which coupled with subdued U.S. dollar (USD) price action failed to help USD/JPY break above 152.50. Investors now appear confident that the Federal Reserve will cut interest rates later this week. On top of this, the unwinding of the “Trump deal” has caused U.S. Treasury yields to fall further and put dollar bulls on the defensive. This in turn calls for caution before preparing for any meaningful intraday appreciation move for the pair.
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