Tuesday tells the Japanese Yen more than next week will

The Japanese Yen is set to receive a crucial update on Tuesday that may have more impact than any developments in the coming week. The Bank of Japan's wage data for July will be released at 23:30 GMT, revealing a year-over-year increase of 3.9% after 3.4%. This real gain in nominal pay, against a deflator of 2.6%, aligns with hawkish expectations.

The Japanese government is expected to report wage growth tonight, but it cannot influence September's hike. Nevertheless, the market may react to the possibility of consecutive moves by the Bank of Japan in October. Meanwhile, the Federal Reserve's policy decision is scheduled for September 16, forty-eight hours after the BoJ's meeting.

The bond market has already priced in the chances of a 3% yield on the ten-year Japanese Government Bond. The Federal Reserve's own market pricing anticipates a quarter-point increase to 59%, with the target band between 3.50% and 3.75%. The Yen's value is influenced by the Bank of Japan's policy, the yield differential between Japanese and US bonds, and global risk sentiment.

As the Bank of Japan gradually eases its ultra-loose monetary policy, the Yen has seen some support, but the divergence between the Bank of Japan and other central banks remains a key factor. The upcoming employment data and inflation numbers from the United States on Tuesday and Friday, respectively, could move the Yen further.