USD/JPY eased slightly on Tuesday, backsliding around one-quarter of one percent and keeping the pair hobbled just below the 148.00 handle. The pair has been adrift in a tight consolidation pattern since the beginning of August, and Yen traders are unlikely to find much of a reason to kick off a new trend ahead of key economic data.

US and Japanese inflation looms large this week
US Personal Consumption Expenditures Price Index (PCE) will land on markets on Friday. Investors will be increasingly apprehensive as the week progresses; global markets are broadly hoping for a fresh round of interest rate cuts from the Federal Reserve (Fed) starting in September, however rate cut hopes could easily be broken if tariff-led inflation impacts show up in headline inflation data too quickly.

Before that, Thursday will bring the latest round of Tokyo Consumer Price Index (CPI) inflation. Core monthly Tokyo CPI is expected to ease to 2.5%, and the Bank of Japan (BoJ) is burdened by (or benefits from, depending on your stance) inverse interest rate expectations from the Fed: the BoJ has been slow to raise already-low interest rates, citing concerns that Japanese inflation may be too low, despite rising above the BoJ's 2% headline target for years.

Source: Fxstreet