• The Japanese Yen retreats from over a one-month high touched against the USD on Wednesday.
• December BoJ rate hike bets, trade war jitters and geopolitical risks might lend support to the JPY.
• The recent decline in the US bond yields could undermine the USD and cap the upside for USD/JPY.

The Japanese Yen (JPY) weakens slightly against its American counterpart during the Asian session on Thursday and erodes a part of the recent strong gains to a five-week top touched the previous day. In the absence of a fresh fundamental catalyst, the intraday JPY slide is more likely to remain limited amid speculation that the Bank of Japan (BoJ) may hike interest rates again in December. Furthermore, US President-elect Donald Trump’s tariff threats and geopolitical risks could underpin the safe-haven JPY. 

Meanwhile, traders have been dialling back on the so-called "Trump trades" following the nomination of Scott Bessent as the US Treasury Secretary. Meanwhile, Wednesday's US macro data did little to temper market expectations that the Federal Reserve (Fed) will lower borrowing costs by 25 basis points in December. This led to a further decline in the US Treasury bond yields, which dragged the US Dollar (USD) to a two-week low and could benefit the lower-yielding JPY ahead of Tokyo inflation data on Friday.