The Japanese Yen (JPY) is seen oscillating in a range against its American counterpart during the Asian session on Tuesday amid mixed fundamental cues. The growing acceptance is that the Bank of Japan (BoJ) will stick to its policy normalization path and hike interest rates by the year-end.

Moreover, the cautious market mood acts as a tailwind for the JPY. Apart from this, the lack of follow-through US Dollar (USD) buying caps the USD/JPY pair near the 148.00 mark. Meanwhile, the BoJ's hawkish outlook marks a significant divergence in comparison to expectations that the US Federal Reserve (Fed) will resume its rate-cutting cycle in September. This keeps a lid on the overnight USD rally and further benefits the lower-yielding JPY.

However, hopes for an early deal to end the prolonged Russia-Ukraine war seem to undermine traditional safe-haven assets and could act as a headwind for the JPY. Traders now look to the release of flash PMIs on Thursday for a fresh insight into the global economic health, which, in turn, will influence the risk sentiment.

The focus, however, will remain glued to FOMC Minutes on Wednesday and Fed Chair Jerome Powell's speech at the Jackson Hole Symposium for more cues about the future rate-cut path. The outlook will drive the USD demand and provide some meaningful impetus to the USD/JPY pair. In the meantime, the fundamental backdrop warrants some caution for aggressive traders and before placing directional bets.

Source: FXstreet