FXStreet notes that USD/JPY remains capped below 110.50. However, economists at Westpac still see a push towards 111.70/ 112.20 but further positive news needs to unfold.

“We maintain the view that USD/JPY is stuck in a broad range – unable to push much above 110.50, unwilling to push much below 109.25. To be sure, the 108.72 mid last week tested the lower end of that range in a pretty material way. But the speed with which we bounced back reinforces the near-term outlook.”

“The big test for us will come late August and then late September. Does Powell lay out a pathway to taper at Jackson Hole Aug 26-28 and then follow up with a formal announcement Sep 21-22.”

“We still see a push towards 111.70/112.20. However, such a move requires further positive news to unfold e.g. infrastructure plans be approved and thus likely delayed until the fall."