FX.co ★ Yen Slips as Dollar, Oil Gain

The Japanese yen weakened toward 155 per dollar on Tuesday, falling for a second straight session as the US dollar firmed ahead of a widely anticipated Federal Reserve interest rate hike this week. The yen also came under pressure from rising oil prices, which push up import costs for Japan’s oil‑reliant economy.

Even so, the currency remained close to seven‑month highs, supported by expectations of more aggressive monetary tightening by the Bank of Japan, the unwinding of carry trades, and signs that domestic investors are stepping up asset repatriation. The BOJ is widely expected to lift its policy rate to 1.25% on Friday, which would mark the highest level since April 1995, as it responds to persistent upside risks to inflation. Market participants are also watching closely for BOJ guidance on the likelihood of a further rate hike later this year.