Japanese Yen remains on the front foot; USD/JPY languishes near 157.30 area

• The Japanese Yen attracts safe-haven flows and strengthens for the third straight day. 
• The BoJ rate hike uncertainty might hold back the JPY bulls from placing fresh bets. 
• Hawkish Fed expectations underpin the USD and lend support to the USD/JPY pair.

The Japanese Yen (JPY) trades with a positive bias against its American counterpart for the third consecutive day and drags the USD/JPY pair away from a multi-month peak touched on Friday. The global risk sentiment takes a hit in the wake of growing acceptance that the Federal Reserve (Fed) will pause its rate-cutting cycle later this month. Apart from this, geopolitical risks drive some flows towards the safe-haven JPY. 

Meanwhile, the broadening inflationary pressure in Japan keeps the door open for another interest rate hike by the Bank of Japan (BoJ) in January or March and turns out to be another factor underpinning the JPY. Some investors, however, are betting that the BoJ may wait until April to seek confirmation that strong wage momentum will carry over into the spring negotiations, which seems to cap the upside for the JPY.