USD/JPY extends recovery above 154.00, focus on Fedspeak

• USD/JPY gains ground near 154.10 in Tuesday's early Asian session. 
• The Fed's Barkin said he has not yet seen evidence that inflation is on track.
• The risk-on environment weighs on the Japanese Yen (JPY).

The USD/JPY pair trades on a stronger note around 154.10 on Tuesday during the early Asian trading hours. The recovery of the pair is supported by the modest rebound of US Dollar (USD) to 105.1o after bouncing off three-week lows. The Federal Reserve Bank of Minneapolis President, Neel Kashkari, is set to speak later on Tuesday. 

The downbeat US Nonfarm Payrolls (NFP) and Services PMI last week have prompted the expectation that the US Federal Reserve (Fed) will cut interest rates this year. Traders expect the Fed to start lowering its borrowing costs at the September meeting. However, Fed Governor Michelle Bowman said last week that she would be willing to raise interest rates further if progress in inflation declining to 2% stalls or reverses. 

Richmond Fed President Thomas Barkin said on Monday that he has not yet seen evidence that inflation is on track, adding that the strength of the job market will give officials time to gain confidence that inflation will fall. Meanwhile, New York Fed President John Williams noted that there would be rate cuts eventually. Williams further stated that he is seeing job growth moderate and that the Fed is looking at the "totality" of the data. Investors will monitor Fedspeak this week. The dovish tone from Fed officials might exert some selling pressure on the Greenback against its rivals. 

On the JPY's front, the risk-on mood continues to undermine safe-haven currencies like the Japanese Yen (JPY). Earlier Tuesday, Japan's top currency diplomat, Masato Kanda, said that the Japanese authorities may take the necessary steps to deal with excessive market volatility, but declined to comment on US Treasury Secretary Janet Yellen's remarks on FX policy. The recent possible intervention from the Japanese government was seen on Friday after the April US jobs report came in below expectations.