USD/JPY in today's New York FX market is expected to trade in a narrow range ahead of Fed Chair Warsh's scheduled speech tomorrow. At the same time, concerns are spreading over developments related to fiscal consolidation.
USD/JPY is expected to trade less actively in today's New York market, with Fed Chair Warsh's speech in Jackson Hole tomorrow likely to be a key market focus. The market is expected to assess its potential reaction depending on the content of the speech and related economic indicators.
Reports that Treasury Secretary Bessent may announce a new initiative centered on fiscal consolidation later this week have heightened caution over fiscal policy-related headlines.
The July PCE deflator, a key indicator watched by the Federal Reserve, rose 3.7% from a year earlier, exceeding the 3.6% forecast, although the rate of increase slowed from May and was unchanged from June.
At the same time, trimmed-mean PCE, which Chair Warsh has emphasized, rose 2.3% year on year, unchanged from the previous month, with the rate of increase continuing to moderate from levels seen in recent months. Whether the chair will refer to this at the Jackson Hole meeting will be a key focus.
The chair has indicated a policy of placing importance on market signals, and some market participants believe a major announcement could come in connection with the Jackson Hole speech. The upper end of the expected range is ¥160.07, while the lower end is ¥158.40.