• The Japanese Yen attracts some haven flows on Tuesday, albeit lacking follow-through.
• The BoJ rate-hike uncertainty acts as a headwind for the JPY amid renewed USD buying.
• A fresh leg up in the US bond yields also contributes to capping the lower-yielding JPY.

The Japanese Yen (JPY) edges higher against its American counterpart during the Asian session on Tuesday, albeit lacking bullish conviction and remains confined in a familiar range held over the past week or so. A slight deterioration in the risk sentiment – as depicted by a weaker tone around the equity markets – offers some support to the safe-haven JPY. That said, the heightened uncertainty over the timing of the next rate hike by the Bank of Japan (BoJ) might continue to cap any meaningful appreciating move for the JPY. 

Meanwhile, Scott Bessent's nomination as the US Treasury secretary provided a short-lived respite to US bond investors amid expectations for a less dovish Federal Reserve (Fed). In fact, market players now seem convinced that US President-elect Donald Trump’s expansionary policies will reignite inflation and force the Fed to cut interest rates slowly. This, in turn, triggers a fresh leg up in the US Treasury bond yields, which assist the US Dollar (USD) in filling the weekly bearish gap and should cap the lower-yielding JPY.