Yen weakens ahead of U.S. election, Fed rate cut expected

The Japanese yen weakened to approximately 152.3 per dollar on Tuesday, retracing some of the gains made in the previous session as caution set in ahead of the tightly contested U.S. presidential election.

Yen weakens ahead of U.S. election, Fed rate cut expected

Investors are also bracing for the U.S. Federal Reserve's policy announcement later this week, where a cautious 25-basis-point rate cut is widely anticipated. Domestically, the Bank of Japan maintained its policy rate at 0.25% last week as it navigates a period of political uncertainty that has raised concerns about Japan's fiscal and monetary strategies. In a post-meeting briefing, BOJ Governor Kazuo Ueda pointed out that economic risks in the U.S. seem to be lessening, indicating that conditions might be favorable for a future rate hike.

Markets eye potential BOJ rate hike to 0.5% in January

Markets speculate that the BOJ could increase rates to 0.5% as soon as January, though changes in the yen's value and inflation data will influence this decision.