The yen weakened on Tuesday, marking its largest one-day percentage drop since mid-July
This decline in the yen was influenced by comments made by Japan's central banker, Kazuo Ueda
On the other hand, the U.S. dollar gained ground on Tuesday, primarily due to investor interest in the latest inflation data
The U.S. dollar strengthened by 0.38% against the yen, recovering from its recent weakening
Bank of Japan's Governor Kazuo Ueda's comments raised expectations of a shift away from the negative interest rate policy
Despite this, influential lawmaker Hiroshige Seko expressed a preference for maintaining an ultra-loose monetary policy
The BOJ's dovish stance contrasts with other global central banks, particularly the Federal Reserve, which initiated rate hikes in March 2022
Interest rate differentials between Japan and the U.S. remain substantial even if Japan abandons negative rates
Traders closely monitored Japan for signs of yen-buying intervention as it weakened past 145 yen per dollar
The dollar index rebounded ahead of U.S. inflation data, potentially impacting Federal Reserve rate hike expectations