USD/JPY remains subdued near 146.50 as Jackson Hole takes center stage

• USD/JPY edges lower near 146.50 amid weakness in the US Dollar.
• The Fed is widely anticipated to start reducing interest rates in September.
• Japan’s robust Q2 GDP growth has boosted expectations of more BoJ’s rate hikes.

The USD/JPY pair exhibits a subdued performance near 146.50 in Tuesday’s European session. The asset edges lower but remains inside Monday’s trading session with investors focusing on the Federal Reserve (Fed) Chair Jerome Powell’s speech at the Jackson Hole (JH) Symposium on August 22-23.

Investors would look for a pre-defined interest rate path from Fed Powell as rate cuts in September seem certain. Market participants would also want to know whether the Fed will start the policy-easing cycle, with an aggressive or a gradual approach.

The market sentiment remains cheerful as the Fed is widely anticipated to pivot to policy-normalization in September. S&P 500 futures have posted some losses in the European session. Risk-perceived currencies are outperforming the US Dollar (USD). The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slides further to multi-month lows near 101.80.

On the economic data front, investors will focus on the preliminary United States (US) S&P Global Purchasing Managers’ Index (PMI) data for August, which will be published on Thursday. The flash PMI report is expected to show that

Meanwhile, the Japanese Yen performs well as upbeat Q2 Gross Domestic Product (GDP) growth has opened room for further policy-tightening by the Bank of Japan (BoJ) this year. The Japanese economy expanded at a robust pace of 0.8% from the estimates of 0.5%. In the first quarter, the economy contracted sharply.