Fragile Yen Awaits Clues from Jackson Hole and Tokyo Inflation

The Japanese Yen remains fragile ahead of key economic events in Tokyo and Jackson Hole. The USD/JPY pair trades at around 159.30, stuck within a narrow range below 160. Analysts at Brown Brothers Harriman note that the pair is entrenched between resistance at 160 and support at the 200-day moving average (158.40), with policy signals from Japan evolving.

Japan's low interest-rate environment and concerns over the country's fiscal outlook continue to weigh on the Yen. Expectations of a rate hike by the Bank of Japan as soon as September have failed to trigger a sustained recovery in the currency.

Fed Chair Kevin Warsh is set to speak at the Jackson Hole Symposium, while Tokyo Consumer Price Index (CPI) data will be released. Kansas City Fed President Jeff Schmid said that the energy shock is spilling into the economy and added that he probably would have supported a rate increase at the July meeting.