USD/JPY gains ground near two-month low near 151.00 as Yen weakens across the board

• USD/JPY advances to near 152.00 at the expense of the Japanese Yen.
• US President Trump announces that he is prepared to impose 25% tariffs on imports of steel and aluminum.
• Investors will pay close attention to Fed Powell's testimony on Tuesday and Wednesday.

The USD/JPY pair attracts strong bids near the two-month low of 151.00 and bounces back to near 152.00 at the start of the week. The asset strengthens as the Japanese Yen (JPY) weakens across the board after the release of the weak Japan Current Account data for Japan.

The Ministry of Japan reported that the Current Account balance was 1,077.3 billion Yen, almost one-third of November's reading of 3,352.5 billion Yen.

The Japanese Yen was outperforming its peers last week on firming speculation that the Bank of Japan (BoJ) will raise interest rates further, a scenario that will reduce interest rate differentials with other central banks.

Meanwhile, the US Dollar (USD) is slightly higher amid a risk-aversion mood on renewed fears of a global trade war. On the weekend, United States (US) President Donald Trump threatened to impose 25% tariffs on all imports of steel and aluminum and reciprocal tariffs over nations where he sees unfair trade practices.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, is 0.1% higher, around 108.20, but has dropped from the intraday high of 108.50.

Investors worry that Trump's international agenda will impact the US economy and cause inflation. This scenario would force Federal Reserve (Fed) policymakers to maintain a cautious stance on interest rates for longer.

For more guidance on the monetary policy outlook, investors will focus on Fed Chair Jerome Powell's testimony before the Congress on Tuesday and Wednesday.