The Japanese Yen (JPY) trades in a limited range at around 159.30 against the US Dollar (USD) during the European trading session on Thursday.
The USD/JPY pair consolidates as investors await Federal Reserve (Fed) Chairman Kevin Warsh’s speech at the Jackson Hole Symposium on Friday
The comments from Fed Chair Warsh are expected to significantly influence central banks’ interest rate expectations, and are expected to be a key trigger for the US Dollar. Dollar support seen hinging on Fed messaging at Jackson Hole Strategists at OCBC note that “questions around the Fed’s reaction function and concerns that policymakers may be placing less emphasis on inflation control” have sharpened market attention on Chair Warsh’s upcoming remarks at Jackson Hole. In their view, the USD could “find support if Warsh and other Fed officials push back against debasement concerns and reaffirm their commitment to returning inflation to the Fed’s 2% target,” with the conference seen as a key venue for the Fed to clarify its stance on inflation and policy credibility.
At the time of writing, the US Dollar Index holds onto previous day’s gains at around 99.15. The USD Index gained sharply on Wednesday after the release of the United States (US) Personal Consumption Expenditure (PCE) Price Index report for July, which showed that price pressures remained sticky. US yields climb as PCE surprise supports Dollar and keeps Fed hike risk alive Strategists at UOB Group note that US Treasury yields firmed after the Fed’s preferred inflation gauge delivered “mixed signals” for July.