• The Japanese Yen weakened as upcoming PM Shigeru Ishiba said that the monetary policy should continue to be accommodative.
• Japan's Retail Trade rose by 2.8% YoY in August, surpassing the expected 2.3% rise.
• August’s US Core PCE Price Index MoM has reinforced the possibility of an aggressive Fed rate-cutting cycle.

The Japanese Yen (JPY) edges lower against the US Dollar (USD) on Monday after dovish comments from Japan's upcoming Prime Minister, former Defense Chief Shigeru Ishiba. Ishiba stated on Sunday that the country's monetary policy should continue to be accommodative, indicating the necessity of maintaining low borrowing costs to support a fragile economic recovery, according to The Japan Times.

Japan's Retail Trade increased by 2.8% year-on-year in August, surpassing market expectations of 2.3% and slightly exceeding the upwardly revised 2.7% rise from the previous month. On a month-over-month basis, seasonally adjusted Retail Trade rose by 0.8%, marking the largest increase in three months, following a 0.2% gain in July.

The US Dollar received downward pressure following Friday’s US Core Personal Consumption Expenditures (PCE) Price Index data for August, which aligns with the US Federal Reserve's (Fed) inflation outlook. This has reinforced the possibility of an aggressive rate-cutting cycle by the central bank.

The CME FedWatch Tool indicates that markets are assigning a 42.9% probability to a 25 basis point rate cut by the Federal Reserve in November, while the likelihood of a 50-basis-point increased to 57.1%, up from 50.4% a week ago.