USD/JPY price action remains choppy with the pair defined by a rather narrow 146-148 range.
Though, as U.S. yields continue to sag with the benchmark 10-year US10YT=RR dipping to 3.82%, risks remain skewed towards USD/JPY weakness.

While the firmer risk tone has helped keep the pair afloat, the near 6.7% recovery in the S&P 500 index .SPX from its August 5 low looks to be somewhat exhausted, particularly as we head towards a seasonally weak period for stocks.
Recall that equities begin to drift lower two months out from a U.S. presidential election.

That latest U.S. CPI report changed very little with regard to the Fed outlook, outside of backing the case for a 25bp rate cut at the September meeting.
The limited reaction further highlights that CPI has stepped down in importance for Fed policy versus the jobs data, given the recent emphasis on the dual mandate.

Now of course, the data so far leans in favour of a 25bp cut, however, should the next payrolls report show that there are genuine cracks in the labour market, this would open the door for a 50bp cut, which, in any case, would pave the way for USD/JPY to test its recent low at 141.70.

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