USD/JPY consolidates around 147.00
The USD/JPY pair traded in a tight range around 147.00 during the European trading session on Monday. The pair fluctuated, even as the US dollar (USD) fell to a monthly low, suggesting the Japanese yen (JPY) was also weakening. At the time of writing, the US Dollar Index (DXY), which tracks the greenback against six major currencies, was down near 97.55.
Firm expectations that the Federal Reserve (Fed) will cut interest rates at its September policy meeting have significantly contributed to the US dollar's weakness. Shifting Fed officials, including Chairman Jerome Powell, also argue that policy rates may be adjusted now as the risks of a downturn in the labor market have increased.
Furthermore, growing doubts about the longevity of tariffs imposed by the United States (US) on its trading partners have also weighed on the US dollar.
On Friday, a US appeals court declared President Donald Trump's tariffs "illegal" because they stemmed from the invocation of emergency legislation. This event is seen as a challenge to the sustainability of Trump's tariff agenda.
Looking ahead, investors will be focusing on a series of economic indicators related to the US labor market, including the ISM Purchasing Managers' Index (PMI) data for August, due this week.
In Japan, investors are skeptical that the Bank of Japan (BoJ) will raise interest rates for the second time this year, as officials have warned of economic uncertainty despite the trade deal with the US.
The BoJ's Nakagawa said last week that "many uncertainties remain," despite the US and Japan having reached a trade deal. He added that US tariffs are weighing on Japanese "business and household sentiment." (ayu)
Source: FXstreet
