USDJPY ends the day flat, resisting dollar strength seen across other G10 currencies (EURUSD: -0.4%, AUDUSD: -0.2%, USDCHF: +0.5%, USDCAD: +0.25%, GBPUSD: -0.1%)
The pair is under pressure due to the back-to-back central bank decisions from the U.S. and Japan. Both the Fed and the Bank of Japan (BOJ) are expected to leave interest rates unchanged, but markets will closely scrutinize any hints of a potential monetary policy pivot in the coming months.
BOJ members returned to hawkish rhetoric following the resolution of U.S. trade tensions, ending a period of "waiting for clearer economic prospects." Additionally, Japanese media report that the BOJ is likely to revise its inflation forecasts upward due to a persistent surge in rice prices (current 2025 forecast: 2.2%).
On the U.S. side, much will depend on the vote split within the ongoing FOMC meeting. If the decision to hold rates is not unanimous, the market may significantly adjust its pricing for a September rate cut. Conversely, a clear continuation of the Fed’s "wait-and-see" stance could prolong the dollar’s strong performance.
The combination of cautious outlooks from both central banks explains investor hesitation regarding further upside in USDJPY. Today, the pair bounced off a key resistance level around 148.800, though it remains above the 30-hour exponential moving average (EMA30, shown in light purple).
Yen is back to its early session levels (today marked in the yellow box). Source: xStation5
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