• USD/JPY oscillates in a narrow range between the 141.60-141.80 area; market players await the key data.
• Japanese policymakers will likely keep monetary and yield control policies unchanged in the July meeting.
• The Federal Reserve (Fed) will announce its monetary policy decision on Wednesday.

The USD/JPY pair consolidates in a narrow range in the early Asian session. The pair currently trades near the 141.74 area, down 0.06% on the day. Markets turn cautious mood in the busy week of economic data and the Federal Reserve's (Fed) and Bank of Japan's (BoJ) monetary policy decisions.

The Japanese Yen fell sharply against the dollar on Friday after Reuters reported that the BoJ will likely maintain the easy-money policy and its yield control policy in the July meeting. On Friday, the Japanese core inflation rate came in at 3.3% in June, up from 3.2% the prior, 3.5% expected. This report showed that inflation in Japan remained above the Bank of Japan's 2% target for the 15th consecutive month.

Despite rising inflation in Japan, the central bank will likely maintain its yield curve control stance. BoJ policymakers prefer looking at more data to ensure wages and inflation continue to rise before modifying policy. This, in turn, led to the weakening of the Japanese Yen against its major rivals due to monetary policy divergences between the BoJ and Fed.

On the US Dollar front, the US economic data released were mixed, with Retail Sales falling short of expectations but indicating consumer resilience and housing market data falling after posting positive figures in May. While, the Unemployment Claims showed a solid figure. The anticipation for the Fed to raise rates after the July meeting increased to 28% from 15.9% last month.

After a rate pause in June, the Fed will announce its monetary policy decision on Wednesday. The market expected a 25 basis point (bps) rate hike. However, the focus will be on the statement and Chair Jerome Powell's press conference. This key event will trigger volatility across financial markets.

Looking ahead, market participants will focus on the Fed's monetary policy decision on Wednesday and the BoJ's interest rate decision on Friday. Also, the flash Manufacturing and Service Purchasing Managers' Index (PMI) from both the US and Japan will be watched by traders