• The Japanese Yen attracts some haven flows amid geopolitical tensions and intervention fears.
• Reduced bets for an imminent shift in the BoJ’s policy stance might cap further gains for the JPY.
• Hawkish Fed expectations underpin the USD and should contribute to limiting losses for USD/JPY.

The Japanese Yen (JPY) edges higher against its American counterpart during the Asian session on Monday, though remains well within the striking distance of a multi-month low touched last week. Investors remain concerned about geopolitical risks stemming from conflicts in the Middle East and the prolonged Russia-Ukraine war. This, along with speculation that Japanese authorities will intervene in the market to prop up the domestic currency, lends some support to the safe-haven JPY. That said, expectations that the Bank of Japan (BoJ) will delay its plans to end the ultra-loose policies, in the wake of a technical recession in Japan, is holding back traders from placing aggressive bullish bets around the JPY.

The US Dollar (USD), on the other hand, manages to hold its neck above a multi-week low touched last Thursday amid bets that the Federal Reserve (Fed) will begin cutting interest rates later than previously expected. In fact, investors have pushed back expectations for the first Fed rate cut to June. Moreover, the markets have converged back to the Fed's projected three 25 basis point cuts this year, which remains supportive of elevated US Treasury bond yields. This underpins the Greenback and further contributes to limiting the downside for the USD/JPY pair. Traders now look forward to this week's key US macro data – the Prelim Q4 GDP print and the Core PCE Price Index – for some meaningful impetus