USD/JPY has held a narrow range around ¥158 for 13 consecutive trading days. With next week's FOMC and BOJ meetings ahead, the market is refraining from building new positions, and trading is expected to remain quiet before the events.
USD/JPY traded in a narrow range centered on ¥158, from around ¥157.84 to around ¥158.39, in the Tokyo foreign exchange market, marking the 13th consecutive trading day with a daily range of less than ¥1. Ahead of next week's Federal Open Market Committee meeting and the Bank of Japan's Monetary Policy Meeting, market participants are holding back from actively building positions.
The contraction in the trading range has become increasingly pronounced this week, narrowing day by day from ¥0.85 on the 19th to ¥0.77 on the 20th and ¥0.55 on the 21st. Takuya Kanda (神田 卓也) of Gaitame.com Research Institute expects limited price movement on the 22nd, with an upside guide near ¥158.60 and a downside guide around ¥157.55.
The projected ranges for major currency pairs are USD/JPY 157.500–158.600, EUR/JPY 176.900–178.200, GBP/JPY 211.100–212.500 and AUD/JPY 110.700–111.500. The BOJ is expected to leave its policy rate unchanged at next week's meeting, while speculation is growing that it will raise its inflation outlook and lay the groundwork for an additional rate hike.
Overseas factors, including movements in long-term US Treasury yields and oil prices, are also affecting the market, and many observers believe the upside is likely to remain capped as the continuation of the BOJ's accommodative policy is confirmed. The market is watching US economic data due next week and developments surrounding the US midterm elections.