Yen Weakened as Dollar Steadies Amid Inflation Data Anticipation

The Japanese yen weakened against the US dollar on Tuesday as the greenback steadied after recent losses, leading traders to focus on upcoming inflation data for clues on interest rate moves.

The US dollar index held steady at a two-day decline, supporting USD/JPY's gain of 0.2% to trade around 149.80. Treasury yields recovered slightly, with the 10-year note yielding around 4.3%, as investors recalibrated expectations for Fed rate cuts.

The core PCE price index is due for release later this week and is expected to show a 0.3% month-over-month increase for January, according to consensus estimates. A hotter-than-expected reading could delay rate cuts and support the dollar, while a soft print would likely revive bets on earlier easing.