USD/JPY retreats from 147.95 with Fed's independence in question 

• The US Dollar pulls back from weekly highs at 147.95 as concerns about the Fed's independence grow.
• Trump's attempts to bend the Fed's consensus to the dovish side are starting to weigh on the US Dollar.
• The Yen is drawing some support from BoJ Ueda's comments, citing concerns about wage growth.
  

The US Dollar pares gains after a three-day rally against the Japanese Yen, as investors ponder the consequences of US President Trump's attempts to gain control of the Federal Reserve, and Governor Cook's decision to sue the president.

Trump's unprecedented decision to oust Cook is just the latest episode in a harsh campaign by the US President to pressure the Federal Reserve to accelerate its monetary easing cycle.

Growing doubts about Fed's independence are punishing the USD

With Cook's replacement, following the nomination of a loyal dove after Kugler's resignation, Trump is seeking to turn the bank's consensus to the dovish side, in a maneuver that compromises the bank's credibility and its ability to set an appropriate monetary policy.

Beyond that, the heightened market expectations that the US central bank will finally cut interest rates in September are increasing bearish pressure on the US Dollar.

The Yen, on the other hand, is drawing some support from recent comments by BoJ Governour, Kazuho Ueda, who warned about the inflationary impact of rising wages, boosting market hopes of a further interest rate hike in the coming months. 

The market is looking at the advanced Tokyo Consumer Sentiment Index data due on Thursday to confirm Ueda's concern about inflation. A strong CPI reading would add pressure on the bank to tighten its monetary policy further and might provide additional support to the Yen. 

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