Analysts are predicting that the yen may fall for a third consecutive day against the majors as investors creep back into carry trading.

The yen fell to 154.66 euro in early Tuesday trading, a drop of 0.6 per cent from its opening position.

Meanwhile, it dropped to 114.76 against the dollar, a slide of 0.5 per cent.

Carry trading - the practice of buying riskier, high-yielding assets funded by low-interest loans - has heavily involved the yen in recent months, as Japan currently has a base rate of just 0.5 per cent.

The Bank of Japan is due to start a two-day meeting at which the base rate, among other issues, will be discussed.

"The Bank of Japan will skip a rate hike this week and interest-rate differentials will widen," Yuuki Sakurai of Fukoku Mutual Life Insurance told Bloomberg, adding: "This gives momentum to the yen carry trade."