On low volume US session, USD/JPY remains near cycle high

The USD/JPY pair trades stable in the 141.80 area after hitting its highest point since November 2022. US Stock and bond markets are closed on Juneteenth celebrations.

US economic data and Chair Powell’s statement on Wednesday will be watched closely. After reaching a multi-month high on Friday, the USD/JPY modestly dropped on Monday to the region of 141.80. Markets are comparatively calm as US traders celebrate Juneteenth.

Following a more than 100 pip gain on Friday for the USD/JPY pair, investors appear to be holding onto gains. The US economic data will be provided during the course of the next sessions, as well as Chair Powell’s appearance before the US Congress and the Bank of Japan (BoJ) minutes, which will be issued on Tuesday.

According to Jerome Powell’s statement from last Wednesday, the Federal Reserve (Fed) decided to suspend raising interest rates because authorities lacked sufficient data to determine how this would affect monetary policy. In that regard, the US Housing data due out on Tuesday, followed by the S&P PMIs on Thursday and Friday, and the Jobless Claims report on Thursday, could affect their predictions for the upcoming July meeting. Additionally, the testimony of Chair Powell before Congress on Wednesday may influence the dynamics of the USD price.

Investors are currently betting on a 75% probability that the Fed will increase interest rates on July 26 by 25 basis points (bps), to a range of 5.25%-5.50%.

On the other hand, investors will gain a better understanding of the BoJ’s position regarding monetary policy that may have an impact on the Yen on Tuesday when it releases the minutes of its Friday meeting.