• The Japanese Yen continues losing ground for the third successive day on Wednesday.
• The uncertainty over the BoJ’s future policy steps continues to undermine the JPY.
• A modest USD uptick lends additional support to USD/JPY and favours bullish traders.

The Japanese Yen (JPY) drifts lower for the third straight day on Wednesday and drops back closer to its lowest level since November 2023 touched against its American counterpart last week. Despite raising interest rates for the first time since 2007, the Bank of Japan (BoJ) struck a dovish tone at the end of the March policy meeting and stopped short of offering any guidance about future policy steps, or the pace of policy normalization. This, in turn, keeps the JPY bulls on the defensive, though verbal interventions from Japanese authorities help limit any further losses.

The US Dollar (USD), on the other hand, continues to draw support from the optimistic outlook for the US economy and doubts whether the Federal Reserve (Fed) will cut interest rates three times this year as projected amid still-sticky inflation. This, in turn, is seen as another factor lending support to the USD/JPY pair and support prospects for further gains. Traders, however, might prefer to wait for the release of the US Personal Consumption and Expenditure (PCE) Price Index on Friday for more cues about the Fed's policy path and before placing fresh directional bets.