USD/JPY consolidates in a familiar rage, holds comfortably above 147.00 mark

■  USD/JPY extends its sideways consolidative price move in a one-week-old trading range. 

■  The BoJ rate-hike uncertainty and a positive risk tone undermine the JPY, lending support.

■  Bets for bigger Fed rate cuts keep the USD bulls on the defensive and act as a headwind.

The USD/JPY pair struggles to capitalize on the previous day's goodish rebound from the 146.00 round figure, or the weekly low and oscillates in a narrow trading band during the Asian session on Thursday. Spot prices, however, hold comfortably above the 147.00 mark and remain confined in a one-week-old range as traders await fresh catalysts before positioning for a firm near-term direction.

The uncertainty over the likely timing of when the Bank of Japan (BoJ) will hike interest rates again is holding traders back from placing aggressive bets and leading to the USD/JPY pair's range-bound price action. In fact, the Japanese central bank lifted the key interest rate to around 0.25%, or the highest since 2008, at the end of the July policy meeting and outlined a plan to taper its bond-buying program. 

Adding to this, BoJ Governor Kazuo Ueda said that the central bank will keep raising rates, and adjust the degree of easing if the current economic and price outlook is realized. The view was echoed by the summary of opinions from the July BoJ policy meeting. That said, BoJ Deputy Governor Shinichi Uchida played down the chances of a near-term rate hike amid the recent volatility in the financial markets. 

Apart from this, a generally positive risk tone undermines demand for the safe-haven JPY and continues to offer some support to the USD/JPY pair. The upside, however, remains capped in the wake of bets for bigger interest rate cuts by the Federal Reserve (Fed), bolstered by signs of cooling inflationary pressures in the US, which keeps the USD bulls on the defensive and acts as a headwind. 

Moving ahead, investors now look forward to the US economic docket – featuring the release of monthly Retail Sales figures, the usual Weekly Initial Jobless Claims, the Empire State Manufacturing Index and the Philly Fed Manufacturing Index. Apart from this, the US bond yields will drive the USD, which, along with the broader risk sentiment, should provide some impetus to the USD/JPY pair.