USD/JPY: no great shakes around 109.50 in Tokyo open, awaiting Yellen's speech

Currently, USD/JPY is trading at 109.56, up 0.01% on the day, having posted a daily high at 109.63 and low at 109.49.

USD/JPY has opened Tokyo with a slight bid of a handful of pips in thin markets as traders await the Jackson Hole speeches later tonight. Yellen takes up the stage first of all at 14GMT.

Will Yellen leave a Dec rate hike on the table at tomorrow's Jackson Hole? - Nomura

Analysts at Nomura explained that given the focus is on “Financial Stability” they do not expect Yellen to focus on the economy and the immediate outlook for monetary policy. However, there could be hints towards a further rate hike later on in the year that should offer support the greenback, unless there are hints of a dovish hike. 

How will Yellen and Draghi 'perform' at the Jackson Hole?

Japanese CPI fell in line in the last hour and didn't move the market in any great shape, a 10 pip round turn. From data overnight, analysts at Westpac noted that the existing home sales fell 1.3% in July (vs +0.5% expected), extending an erratic uptrend since 2010. 

"Kansas Fed manufacturing rose from 10 to 16 (vs 11 expected). Fed hawk George expected another rate hike this year and balance sheet tapering to start soon, noting the economy is in good shape. Kaplan added the terminal Fed rate may be closer to 2% than 3%," added the analysts at Westpac. 

Meanwhile, markets remain concerned about the risks associated with Trump's administration failing to deliver on stimulus and a government shutdown next month, weighing on US stocks, rates and the dollar.

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the short term picture for the pair is neutral, given that in the 4 hours chart, the price remains well below its 100 and 200 SMAs, both maintaining their bearish slopes. " 

While technical indicators head nowhere around their mid-lines. Nevertheless, the risk remains towards the downside, with another attempt of breaking below 108.80 probably resulting in a test of the year low set last April at 108.12," added Valeria.