• The Japanese Yen eases following the release of Trade Balance data on Wednesday.
• Japan's Merchandise Trade Balance reported a deficit of ¥621.84 billion in July, swinging from a ¥224.0 billion surplus in June.
• The US Dollar holds ground due to market caution ahead of the FOMC Meeting Minutes.

The Japanese Yen (JPY) halts its three-day winning streak against the US Dollar (USD) following the release of Trade Balance data on Wednesday. However, the JPY's decline might be limited due to the growing likelihood of another near-term interest rate hike. Traders are also anticipating Bank of Japan (BoJ) Governor Kazuo Ueda's appearance in parliament on Friday, where he will discuss the central bank's decision last month to raise interest rates.

Japan's Merchandise Trade Balance fell into a deficit of ¥621.84 billion in July, reversing the surplus of ¥224.0 billion reported in June and missing market estimates of a ¥330.7 billion shortfall. This marks the fifth deficit so far this year, as imports increased at a much faster pace than exports.

The US Dollar (USD) attempts to halt its three-day losing streak as traders turn cautious ahead of Wednesday’s FOMC Meeting Minutes for July’s policy decision. Furthermore, traders await Fed Chair Jerome Powell's upcoming speech at Jackson Hole on Friday.

CME FedWatch Tool suggests that the markets are now pricing in a nearly 67.5% odds of a 25 basis points (bps) Fed rate cut in its September meeting, down from 76% a day ago. The probability of a 50 basis points rate cut fell to 32.5% from 53.0% a week earlier.