At the start of the Tokyo market, USD/JPY (dollar-yen) fell to 153.33. However, it soon stabilized and moved higher. Many expect the Bank of Japan will not raise interest rates during this week’s meeting. Because of this, the yen weakened not only against the dollar but also against other currencies. In the New York market, USD/JPY rose to 154.47.
On the other hand, when U.S. long-term interest rates rise, the dollar becomes stronger. The FOMC meeting is expected to include a 0.25% rate cut, but this is already priced in, which makes the dollar likely to strengthen.
Since the market already expects the Bank of Japan to keep rates unchanged and the U.S. Federal Reserve to cut rates, we may see some adjustments before the meetings. This means the dollar may weaken, and the yen may strengthen slightly.
USD/JPY Expected Range: 154.80- 153.50
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