USD/JPY: Yen Gains Amid Cautious Trades Ahead of FOMC, BOJ
The Japanese currency reversed a minor portion of yesterday’s losses and
edged higher against its US rival in the Asian trades, with market now
awaiting fresh incentives from the Fed and BOJ policy outcomes.
USD/JPY holds above 111 barrier
The dollar-yen pair snapped a pullback seen yesterday, and drifted lower this session as dismal US economic data continue to weigh on the investors’ minds. While mixed trading on the Asian indices also collaborates to the downbeat sentiment around the major. At the time of writing, USD/JPY hovers near session lows around 111.15, recording a -0.15% loss on the day.
While markets appear to ignore the divergent policy outlooks between the Fed and BOJ, as both the central banks are due to announce their monetary policy outcomes in next 24 hours.
Analyst at BNZ noted, “The prevailing view of FOMC members is that the market under-prices the risk of further Fed tightening this year, so the risk is that the statement is USD-supportive.”
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 111.70/88 (50-DMA/ 2-week tops). A break above the last, the major could test 112 (psychological levels). While to the downside, the immediate support is seen at 110.66/50 (Apr 26 Low/ psychological levels) and below that at 110.29/00 (10-DMA/ round number).