Ella 
During the Asian session on Tuesday, the Japanese yen (JPY) fluctuated lower against the US dollar, boosting the USD/JPY rebound from the lowest level since October 16, which was hit the day before. However, speculation that the Bank of Japan (BoJ) may raise interest rates again in December should prevent the yen from retreating sharply. In addition, U.S. President-elect Donald Trump’s threat to introduce trade tariff policies and continued geopolitical risks may support the risk aversion sentiment in the Japanese yen.
Meanwhile, a recent decline in U.S. Treasury bond yields failed to boost the dollar’s gains after rebounding from multi-month lows overnight and could further boost the low-yielding Japanese yen. Investors therefore need to exercise caution before making aggressive bullish bets on USD/JPY. In addition, traders may also choose to wait for more clues on the path of interest rate cuts from the Federal Reserve (Fed). Therefore, this week’s crucial US macro data will push the dollar stronger and provide fresh momentum for USD/JPY.
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