USD/JPY Stuck in Range as Markets Await BoJ Signals

The USD/JPY currency pair remains in a narrow trading range around 159.31 as investors wait for fresh signals on Bank of Japan monetary policy.

Markets are now pricing in an approximately 87% probability of a 25-basis-point BoJ rate hike in September, which would bring the interest rate to 1.25%. This has increased sharply from around 23% before the July meeting.

Former BoJ board member Seiji Adachi recently stated that the central bank is likely to raise rates as early as next month and could follow with another hike in January. He warned that keeping rates unchanged could reignite yen selling and accelerate imported inflation.

The market's attention is now focused on today's speech by BoJ Deputy Governor Ryozo Himino, who may provide fresh signals on the timing of the next rate hike. Additionally, investors are waiting for US economic data to be released, which will also influence market direction.