Ella 
In Asia on Monday, USD/JPY ended two consecutive losses and hovered around 145.40 thanks to employment and manufacturing survey data. But market participants are now looking for more clues to better understand the direction of the Fed’s rate hikes.
Minutes of the Federal Reserve’s July meeting showed that policymakers had different views on raising interest rates. While many committee members expected that rising interest rates could lead to economic contraction, most policymakers continued to pledge to reduce inflation to achieve the 2% inflation target.
In addition, traders may speculate that Japanese authorities will intervene to protect the yen from further appreciation against the dollar. This move could affect the price action of USD/JPY and affect the overall trend.
The People’s Bank of China (PBoC) cut its one-year benchmark lending rate by 10 basis points on Monday to encourage credit demand. A worsening property slump and low consumer spending have raised concerns about China’s economic recovery, which could lead to more policy stimulus from Beijing. The development could lend support to the export-reliant Japanese currency.
In addition, this week’s Jackson Hole annual symposium will also be in the spotlight. During the meeting, central bankers, policy experts and academics will gather to analyze the global economic outlook broadly, with a special focus on how to deal with the current inflation situation. Market participants will be keeping a close eye on upcoming U.S. data this week, namely existing home sales for August and the preliminary S&P global PMI survey, as well as Japan’s consumer price index (CPI).
