At the Federal Open Market Committee (FOMC) meeting, the U.S. showed a more careful view about cutting interest rates than expected. This pushed the dollar up. After falling to the mid-145 yen level, USD/JPY rose to the 147 yen level. When Minister Takaichi announced she will run in the leadership election, the yen weakened further. Later, strong U.S. job data pushed the dollar up to 148.26 yen, showing solid movement.
Today, the Bank of Japan (BOJ) is expected to keep interest rates the same. This is already expected by the market. While lower trade concerns would normally support a rate hike, political uncertainty in Japan makes the BOJ less likely to raise rates. The market thinks the BOJ will stay cautious.
If the BOJ shows a stronger chance of raising rates, the yen could gain. The 149 yen level is a strong resistance, because it matches the 200-day moving average, the top of the Bollinger Band, and the 61.8% Fibonacci retracement level. On the other hand, near 146 yen there is strong support with the 90-day moving average and the lower Bollinger Band. Because of this, the pair will likely move inside the range.
Expected USD/JPY range: 146.40 – 148.60 yen
Note: This information does not guarantee profits. Please make your own trading decisions.