USD/JPY Holds Key Support as Fed and BOJ Meetings Loom
USD/JPY remained nearly flat on Thursday, recovering from a low of 151.81 as firmer U.S. Treasury yields provided support following stronger-than-expected PPI data and a solid 30-year auction. The pair continues to hover above key technical levels, including the 152.04 200-day moving average and the pivotal 152 level, suggesting underlying support despite stalling upward momentum. Market focus remains on next week’s Fed and BOJ meetings, with risk reversals indicating limited downside for USD/JPY. Earlier reports that the BOJ may keep rates steady next week have tempered expectations for significant yen strength.
Technical Analysis
Technically, USD/JPY is at an inflection point. Support lies at 152.04, the 200-DMA, with additional protection from the Ichimoku cloud top at 151.66. Resistance is seen at 152.71-84, encompassing the 50% Fibonacci retracement of the 156.76-148.65 drop and this week’s high. A break above 153.15, the weekly cloud top, would signal a potential resumption of bullish momentum. However, the doji candle near the center of the 21-day Bollinger Bands reflects market indecision, suggesting that a catalyst is needed for a decisive breakout.
Outlook
Upcoming data and central bank guidance will likely determine USD/JPY’s direction. While near-term seasonals favor yen weakness, sentiment could shift if next week’s Fed meeting signals caution or if U.S. data disappoints. Similarly, clarity from the BOJ on its policy outlook could influence yen sentiment. For now, USD/JPY is likely to remain range-bound between 151.66 and 152.84, awaiting more concrete cues.
