• The Japanese Yen weakens slightly on Tuesday, though the downside remains cushioned.
• The BoJ’s hawkish hints, along with a weaker risk tone, offer support the safe-haven JPY.
• The US election-related uncertainty and Fed rate cut bets keep the USD bulls on the defensive.

The Japanese Yen (JPY) ticks lower against its American counterpart during the Asian session on Tuesday and moves away from a one-week high touched the previous day. The downside for the JPY, however, seems limited as traders might refrain from placing aggressive directional bets amid the uncertainty surrounding the US presidential election. Moreover, bets for a potential interest rate hike at the next Bank of Japan (BoJ) policy meeting in December could also offer some support to the JPY. 

Meanwhile, the "Trump trade" unwinding, along with expectations that the Federal Reserve (Fed) will lower interest rates later this week, leads to a further decline in the US Treasury bond yields, resulting in the narrowing of the US-Japan rate differential. This keeps the US Dollar (USD) bulls on the defensive and should act as a tailwind for the JPY. Furthermore, a weaker risk tone could benefit the JPY and contribute to keeping a lid on any meaningful appreciating move for the USD/JPY pair.