USD/JPY skid below 129.00 on subdued DXY, focus shifts to Fed’s Powell and Japan’s CPI

• USD/JPY is establishing below 129.00 as DXY has performed lackluster in the Asian session.
•  Fed Powell’s speech will put some more light on the measures to bring price stability.
• Japan’s economy will release the National CPI figures this week.

The USD/JPY pair has displayed a more than 50-pips slippage in the Asian session amid subdued performance from the US dollar index (DXY). The light economic calendar has paused the DXY in a tight range and investors are on the sidelines ahead of the speech from Federal Reserve (Fed) chair Jerome Powell on Tuesday.

Fed’s Powell in his interview with the Marketplace national radio program on Friday unexpectedly added the option of two more jumbo rate hikes consecutively for the next policy meetings on the rate hike alternatives list. Earlier, the street was expecting only one more jumbo rate hike in addition to the 50 basis points (bps) elevation announced in the first week of May. Now, more than two jumbo rate hikes in a single year may put the greenback in a prolonged bullish trajectory.

Also, Fed’s Powell emphasized bringing price stability as mounting price pressure is weighing on the paychecks of the households.

Meanwhile, the yen bulls are awaiting the release of the National Consumer Price Index (CPI) on Friday. The yearly figure is seen at 1.5%, higher than the previous figure of 1.2%. Also, the core CPI that excludes Food and Energy is seen at -0.9%, lower than the prior print of -0.7%. The inflation figures are not highlighting any sign that could compel the Bank of Japan (BOJ) to adopt a hawkish tone for policy rates. A prudent monetary policy is expected to stay for longer.