Japanese Yen holds near one-month top vs weak USD as traders await Fed, BoJ meetings
The USD/JPY pair attracts fresh sellers following an uptick at the start of a new week, stalling Friday's modest bounce from the vicinity of the 156.00 mark, or its lowest level since September 18.
The US Dollar (USD) versus Japanese Yen (JPY) exchange rate is near a one-month high as traders wait for key meetings from the Federal Reserve (Fed) and the Bank of Japan (BoJ). The USD/JPY pair initially struggled to recover from the 156.00 level after a strong opening on Monday, indicating vulnerability. However, the upcoming Fed decision, rate statement, and comments from Fed Chair Kevin Warsh could impact the market sentiment.
Additionally, the Advance Q3 GDP print and Personal Consumption Expenditures (PCE) Price Index data will also influence the USD/JPY pair. On the other hand, the BoJ's policy update on Friday will further determine the near-term trajectory of the USD/JPY pair. The Japanese Yen has been supported by BoJ Governor Kazuo Ueda's hawkish comments, signaling an imminent interest rate hike due to underlying inflation nearing the 2% target.
Despite the recent decline in US bond yields, the Yen still benefits from a potential interest rate increase by the BoJ. In the meantime, traders are cautious about aggressive bets on the USD due to the anticipated rate hike in December. The USD/JPY pair is currently trading below the 200-period Simple Moving Average (SMA) on the 4-hour chart, with the 200-period acting as a bearish barrier.
The pair's downside support lies at the 38.2% Fibonacci retracement level at 156.69, followed by a deeper retracement cluster at 155.98 and 155.26 (50% and 61.8%).
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