Key facts
- The yen eased against the dollar as risk appetite returned.
- The Bank of Japan is expected to keep interest rates steady at 1.25% but signal readiness for further hikes.
- Japan's service-sector inflation rose 3.7% in September.
- The dollar index held steady near a two-week high.
- The euro fell to a near two-week low against the dollar.
The Japanese yen weakened against the US dollar on Tuesday as a tech-led rebound revived risk appetite. The dollar index held steady near a two-week high. Traders are closely watching the Bank of Japan's policy decision later this week, with expectations that the central bank will keep interest rates steady at 1.25% but signal its readiness to continue raising borrowing costs due to mounting price pressures. Japan's service-sector inflation rose 3.7% in September from a year earlier, data showed on Tuesday. The yen had been among the best-performing major currencies last week. The dollar was also underpinned by a weaker euro, which fell to a near two-week low against the greenback.