USD/JPY weakens around 153.90 in Tuesday’s early Asian session. 

The Fed will likely keep an interest rate on hold at its July meeting on Wednesday. 

The BoJ is expected to raise rates at its July 31 meeting, according to a Reuters poll of economists.

The USD/JPY pair trades on a weaker note near 153.90 during the early Asian session on Tuesday. The pair trims gains after retreating from 153.35 amid the risk-off mood and rising speculation of a rate hike by the Bank of Japan (BoJ). The BoJ and Federal Reserve (Fed) Interest Rate Decision on Wednesday will take center stage ahead of US employment data on Friday. 

The markets don’t expect the US Fed to cut the interest rate at its July meeting this week, but they expected the Fed officials to set the stage for an easing policy at its September meeting. Traders are now pricing in 100% odds of a Fed rate cut by at least a quarter percentage point in September, according to data from the CME FedWatch Tool. The rising bets on the Fed rate cut continue to weigh on the Greenback against the Japanese Yen (JPY) in the near term.