USD/JPY drifts lower below 152.00 amid renewed trade tensions

• USD/JPY edges lower to near 151.80 in Wednesday's early Asian session. 
• Fed's Powell said the central bank is on track to deliver another quarter-point rate cut later this month.
• Analysts expect political uncertainty might delay additional BoJ rate hikes.

The USD/JPY pair attracts some sellers to around 151.80 during the early Asian session on Wednesday. The US Dollar (USD) weakens against the Japanese Yen (JPY) amid escalating trade tensions between the US and China and a persistent risk-off environment. The Federal Reserve officials are scheduled to speak later on Wednesday, including Stephen Miran, Christopher Waller and Jeff Schmid.  

Reuters reported on Tuesday that the US and China began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil. Additionally, US President Donald Trump said that he could still impose 100% tariffs on China on November 1 or sooner, depending on Beijing's next move in the rare earths dispute. 

Fed Chair Jerome Powell stated that the US central bank is on track to deliver another quarter-point interest-rate reduction later this month, even as a government shutdown significantly reduces its read on the economy. Powell highlighted the low pace of hiring and noted that it may weaken further. Expectations for a Fed rate cut in October were little changed after Powell's comments. Investors see a nearly 100% possibility of a rate cut, according to the CME FedWatch tool. 

On the other hand, political uncertainty in Japan, particularly following the withdrawal of the Komeito party from the ruling coalition, could create a challenge for the Bank of Japan (BoJ) to hike interest rates further and continue to undermine the JPY.  Last week, Etsuro Honda, a close economic adviser to Sanae Takaichi, said that the BoJ should be cautious about raising interest rates again, as the economy is still fragile.