Dollar-Yen Rangebound Ahead of Jackson Hole and July PCE Deflator Release

The dollar-yen pair is expected to trade within a narrow range of 158-159 on August 26 as investors await the release of the U.S. July PCE deflator, a key indicator for monetary policy direction.

Market participants are in a wait-and-see mode ahead of Federal Reserve Chair Warsh's Jackson Hole speech scheduled for August 28, making aggressive position-taking difficult.

Dollar-yen saw some dollar buying on August 25 after the breakdown of U.S.-Canada trade negotiations, but it pared its gains when reports emerged that the U.S. Treasury Department may use the TGA as a funding source for expanding Treasury buybacks.