In early Asian trading on Tuesday, Japan's Ministry of Finance (MOF) said via Reuters that the government will use 3.48 trillion yen in budget reserves to deal with rising prices and the coronavirus pandemic.

"The decision was made by Prime Minister Fumio Kishida at a cabinet meeting," Reuters added.

Earlier, Japan's nationwide consumer price index (CPI) rose 3.0% on an annual basis in August, compared with the previous estimate of 2.6%, which also provided a positive catalyst for the yen.

Market fluctuation

Even so, USDJPY remained on the defensive around 143.20 as traders looked ahead to the Fed decision on Thursday. As the 10-year US Treasury yield and two-year US Treasury yield remained volatile and low after hitting multi-day highs the previous day, it posed a challenge to the dollar/yen.

In other news: USD/JPY fell to near 143.00 as the pair weakened further ahead of the Fed decision