USD/JPY: Two events to weigh on the Greenback this week – DBS

FXStreet Insights Team FXStreet

Expect two events to weigh on the greenback this week, DBS senior FX strategist Philip Wee notes.

Fed and BoJ to talk this week

“During the special parliamentary hearing on August 23, Bank of Japan Governor Kazuo Ueda will likely stand by the plan to raise interest rates through Fiscal Year 2025. At the Kansas City Fed Jackson Hole Symposium on August 22-24, Fed Chair Jerome Powell should pave the ground to remove top-level restriction via a 25 bps rate cut at the FOMC meeting on September 18.”

“Expect Powell to play down the market’s recent panic about a US recession and reassert his optimism for a soft landing in the economy and the labour market. Ueda will unlikely expect the Nikkei’s ‘Black Monday’ sell-off on August 5 to derail the upgrades to the BOJ’s economic and inflation forecasts announced on July 31.”

“Hence, USD/JPY should be eyeing lower levels again after its short covering from 141.70 on August 5 to 147.60 last Friday.”

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FXStreet Insights Team

FXStreet

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