The yen erases losses, reports suggest Bank of Japan may raise interest rates this month.

The yen erased its previous losses against the US dollar, while Japanese 10-year government bond futures fell. A media report earlier suggested that the Bank of Japan may raise interest rates in December. The report cited three government sources as saying that the Japanese government is expected to tolerate the central bank's decision to raise interest rates. The yen rose to 155.19 against the US dollar, down from 155.54 before the report was published. The exchange rate remained relatively stable during the Tokyo session. Overnight index futures indicate that the probability of a rate hike in December has increased to 91%, up from 56% a week ago. Bank of Japan Governor Haruhiko Kuroda on Monday sent the clearest signal so far, hinting that the central bank may raise interest rates when it announces its policy decision on December 19th.