USD/JPY consolidates around 147.00 at the start of busy US-data week

• USD/JPY oscillates in a tight range around 147.00 as both the US Dollar and the Yen are underperforming.
• Investors expect the Fed to cut interest rates in the September's policy meeting.
• There is uncertainty over BoJ's plans of hiking interest rates again this year.

The USD/JPY pair trades in a tight range around 147.00 during the European trading session on Monday. The pair wobbles, even as the US Dollar (USD) sinks to its monthly low, suggesting that the Japanese Yen (JPY) is also weak.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, slides to near 97.55.

Firm expectations that the Federal Reserve (Fed) will cut interest rates in the policy meeting in September have contributed significantly to weakness in the US Dollar. A slew of Fed officials, including Chair Jerome Powell, has also argued that policy rates can be adjusted now as downside risks to labor market have increased.

Additionally, increasing doubts over the longevity of tariffs imposed by the United States (US) on its trading partners have also weighed on the US Dollar.

On Friday, the US appeals court called tariffs by President Donald Trump as "illegal" for being stemmed from invoking the emergency law. The event is seen as a challenge for sustainability of Trump's tariff agenda.

Going forward, investors will focus on a slew of US labor market-related economic indicators, and ISM Purchasing Managers' Index (PMI) data for August releasing this week.

In Japan, investors doubt that the Bank of Japan (BoJ) will raise interest rates for the second time this year as officials have warned of economic uncertainty despite the finalization of a trade agreement with the US.

BoJ's Nakagawa said last week that "there remain many uncertainties", despite the US and Japan reaching a trade agreement. He added that US tariff policies are weighing on Japan's "business and household sentiment".