Early on Friday, the Japanese yen continues to trade at a six-week low against the US dollar as traders look forward to the upcoming trade talks between US and China. At the time of writing, USD/JPY is trading at around 108.16.

However, expectations of a possible rate cut by the Fed in its upcoming meeting next week is capping the gains in the Guppy. On Thursday, the ECB sounded dovish, announcing a 10 bps rate cut and restarting its QE program to support the weakening Eurozone economy.

The following week should be an interesting one for USD/JPY, with both central banks – the Fed as well as the BOJ due to hold their meetings. Traders will keep an eye on both banks to see if they turn dovish in the face of recent trade tensions and weakness in economic growth, especially in Japan.