USD/JPY trades above 147.50, upside capped by Fed concerns

• USD/JPY may struggle as the US Dollar could face challenges due to rising concerns over Fed independence.
• President Trump announced the removal of Fed Governor Lisa Cook from her position.
• Japan's chief trade negotiator, Akazawa, will return to the United States on Thursday for talks.

USD/JPY recovers its recent losses from the previous session, trading around 147.60 during the Asian hours on Wednesday. However, the upside of the pair could be restrained as the US Dollar (USD) may struggle amid rising concerns over Federal Reserve (Fed) independence.

US President Donald Trump announced early Tuesday that he was removing Fed Governor Lisa Cook from her position on the Fed's board of directors. This is considered the first instance of a president firing a central bank governor in the Fed's 111-year history.

According to Reuters, if Cook's seat becomes vacant, President Trump would have the chance to secure a majority on the Fed's seven-member board. Trump has already nominated White House economist Stephen Miran to a temporary seat that expires in January and has suggested Miran could also be in the running for Cook's position. Meanwhile, The Wall Street Journal reported that David Malpass, former World Bank president, is another potential candidate.

The Japanese Yen (JPY) could gain ground amid increasing stability in Japanese domestic politics amid improving public approval. Yomiuri newspaper public opinion poll showed on Monday a 20% rise in support for Japanese Prime Minister Shigeru Ishiba despite his ruling coalition losing its majority in July's parliamentary election.

Asahi TV reported on Wednesday that Japan's head trade negotiator, Akazawa, is heading back to the United States (US) on Thursday to discuss Japanese investment in the US. Traders await upcoming economic releases later this week, including Japan's Tokyo Consumer Price Index (CPI) and Retail Trade data due on Friday.