Yen slips as Dollar climbs ahead of Fed and BoJ meetings

The Japanese Yen weakened on Tuesday as the US Dollar advanced toward the 155 yen area while markets focused on upcoming central-bank decisions.

The Dollar benefited from rising US Treasury yields and expectations for a Federal Reserve rate hike. At the same time, traders were watching Japan for signals on whether the Bank of Japan could tighten policy at its upcoming meeting.

Reuters reported that the Yen's sharp recent rally faces a key test at Friday's BoJ decision, while markets also expected a Fed hike on Wednesday. The contrast between US and Japanese policy expectations remains important for USD/JPY.

Oil prices and global inflation risks are also important for the Yen because higher energy costs can affect Japan's import bill and influence monetary-policy expectations.