• The Japanese Yen gains positive traction and draws support from a combination of factors.
• An unexpected dip in Japan’s unemployment rate and intervention fears underpin the JPY. 
• The BoJ rate-hike uncertainty should cap gains ahead of this week’s central bank event risk.

The Japanese Yen (JPY) strengthened a bit against its American counterpart during the Asian session on Tuesday and moved away from a nearly three-month low touched the previous day. An unexpected fall in Japan's unemployment rate during September pointed to tighter labor market conditions, which could fuel consumer spending and demand-driven inflation. Adding to this, remarks by Japan's Finance Minister Katsunobu Kato revived fears of a possible government intervention and offer support to the JPY. This, along with subdued US Dollar (USD) price action, exerts some downward pressure on the USD/JPY pair. 

Meanwhile, Japan Democratic Party for the People (DPP) leader Yuichiro Tamaki opposed further Bank of Japan (BoJ) rate hikes. Apart from this, a positive risk tone should keep a lid on any meaningful appreciation for the safe-haven JPY. Furthermore, the recent upsurge in the US Treasury bond yields, bolstered by bets for a less aggressive policy easing by the Federal Reserve (Fed) and deficit-spending concerns after the US election, should contribute to capping the lower-yielding JPY. Traders might also refrain from placing aggressive directional bets ahead of the BoJ meeting and important US macro releases this week.