• The Japanese Yen depreciates despite a hawkish sentiment surrounding the BoJ’s policy outlook.
• The JPY’s downside could be restrained as traders expect the BoJ to increase interest rates further.
• The US Dollar received downward pressure as US Fed Chair Powell signaled a rate cut soon.

The Japanese Yen (JPY) fell slightly against the US Dollar (USD) on Wednesday. However, conflicting policy outlooks from the Bank of Japan (BoJ) and the Federal Reserve (Fed) are exerting downward pressure on the USD/JPY pair. BoJ Governor Kazuo Ueda indicated in Parliament on Friday that the central bank might consider further interest rate hikes if its economic forecasts prove accurate.

The downside for the JPY may be limited by the hawkish sentiment surrounding the Bank of Japan (BoJ). Meanwhile, Fed Chair Jerome Powell remarked at the Jackson Hole Symposium that "the time has come for policy to adjust." However, Powell did not specify the timing or magnitude of potential rate cuts.

Additionally, San Francisco Federal Reserve President Mary Daly mentioned in a Bloomberg TV interview on Monday that "the time is upon us" to begin reducing interest rates, likely starting with a quarter-percentage point cut.