USD/JPY consolidated its recent gain near the 146.30 area, All eyes are on Japanese CPI, Jackson Hole

• USD/JPY oscillates around the 146.15-146.40 region in a narrow trading band.
• Foreign investors sold $9.26 billion in Japanese Government Bonds than in the previous six months.
• Traders raise their bets on additional rate hikes by the Federal Reserve (Fed).
• Investors await Tokyo Consumer Price Index, Fed Chairman Jerome Powell Speaks.

The USD/JPY pair currently trades near 146.37 during the Asian trading hours on Tuesday. The stronger US Dollar is supported by the rise of US US Treasury bond yields. On late Monday, the US 10-year Treasury bond yields climb to 4.35%, the highest level since 2007.

Markets believe the Bank of Japan (BoJ) could intervene by selling the Greenback around 150. It’s worth noting that the Japanese central bank prompted massive dollar selling in September and October last year as the Japanese Yen approached the 145 zone.

Furthermore, the Japan Securities Dealers Association and Nikkei Asia reported on Tuesday that foreign investors sold 1.35 trillion yen ($9.26 billion) Japanese Government Bonds (JGBs) than in the previous six months. Markets players are concerned about the BoJ policy adjustment after the central bank allowed the Yield Curve Control (YCC) band to move above the cap as long as it remains below 1.0%.

Across the pond, market players raise their bets on additional rate hikes by the Federal Reserve (Fed) despite the robust labor data and weaker inflation data. Federal Reserve (Fed) Chairman Jerome Powell Speaks on Friday will be a guide for investors and could provide insights into economic conditions. That said, the monetary policy differential between the US and Japan is the main driver of the Yen’s weakening. A hawkish tone from Fed might lift the US Dollar and support the USD/JPY pair.

Looking ahead, the preliminary Japanese Jibun Bank PMI data for August will be due on Wednesday and the top-tier data, Tokyo Consumer Price Index YoY for August will be released on Friday. On the US docket, Existing Home Sales, S&P Global PMIs, Initial Jobless Claims, and Durable Good Orders will be released later this week. Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday will be the highlight of the week. Traders will find opportunities around the USD/JPY pair.