USD/JPY was rangebound in the mid-¥159s during Tokyo morning trading. Since the start of the week, there have been few catalysts for yen selling and dollar buying, and no clear direction has emerged. While views are emerging that an additional rate hike is likely at next month's Bank of Japan meeting, developments surrounding the likelihood of its implementation remain unsettled.
USD/JPY traded in the low ¥159s during Tokyo hours, lacking direction ahead of the Bank of Japan's monetary policy meeting. Although yen selling and dollar buying briefly intensified at the start of the week, trading thereafter remained subdued near the previous day's levels. With few notable cues across the broader market, trading was somewhat lacklustre.
EUR/JPY was in the high ¥183s, GBP/JPY was near ¥215.00, and AUD/JPY was in the mid-¥112s, with each pair moving only slightly. The major currency pairs showed no strong direction and largely held their Tokyo-session levels.
The backdrop is the market view that an additional rate hike is highly likely at next month's Bank of Japan monetary policy meeting. At the same time, concerns remain entrenched over whether the Japanese economy can withstand the burden of higher interest rates, and some market participants remain cautious about the actual implementation of a hike.
As a result, the prevailing view is that trading will await the emergence of fresh catalysts, making it difficult to find a clear direction in the short term and keeping conditions rangebound.