USD/JPY traded with no clear direction at the start of the week ahead of the US and Japanese monetary policy meetings. In the short term, market views are divided between ¥155 as the upside target and ¥150 coming into view if the pair falls below ¥152. Oil price trends and geopolitical risks are also influencing the market, heightening caution over the currency pair's future moves. With the US and Japanese meetings ahead, the currency market is expected to become increasingly cautious.
This week, USD/JPY is expected to seek direction ahead of the US and Japanese monetary policy meetings. Some market participants see ¥155 as the upside target, while others believe that a break below ¥152 could bring ¥150 into view.
In the New York market on the 14th, dollar buying emerged against a backdrop of higher oil prices. Saudi Arabia's shutdown of major pipelines contributed to the move, while rising US long-term interest rates and dollar buying pushed up the currency pair.
The Bank of Japan is expected to hold its monetary policy meeting from the 17th to the 18th, with a 0.25% rate hike widely seen as almost certain. The US FOMC is expected to meet from the 15th to the 16th. Rates are widely expected to be left unchanged, although expectations of a rate hike remain.
Geopolitical risks and developments in oil prices could trigger volatility in the currency market. Following the moves at the end of last week, market participants are expected to continue watching the policy decisions, statements and press conferences closely this week.