USDJPY is hovering around 149.65 ahead of significant events in the United States and Japan.
The USDJPY pair is trading near 149.65, having retraced from monthly highs of 150.77. During the Asian session on Monday. Traders prefer to remain on the sidelines as Japan and the United States meet to discuss monetary policy. These occurrences may cause volatility in the market.
Analysts believe the Bank of Japan’s (BoJ) ultra-accommodative monetary policy is coming to an end.
Having stated that, the US-Japan monetary policy divergence weighs on the Japanese Yen (JPY). Against the US dollar (USD). Some speculate that the Bank of Japan (BOJ) may change its yield curve control (YCC) strategy. According to a Reuters survey, economists anticipate the Bank of Japan will terminate. Its negative interest rate policy next year. With more expecting the central bank to end its ultra-accommodative monetary policy soon.
Market participants will be paying careful attention to the Federal Reserve’s interest rate decisions on Tuesday and Wednesday, respectively.
The Federal Reserve (Fed), on the other hand, is anticipated to keep interest rates constant at the end of its two-day meeting on Wednesday. Despite the fact that the Fed’s preferred inflation measure, the Core US Personal Consumption Expenditure Index (PCE), remains well above the 2% objective. The Core US was released on Friday. PCE fell to 3.7% YoY in September from 3.8% the previous month, while monthly Core PCE climbed by 0.3% from 0.1% the previous month. Furthermore, the headline PCE Price Index for September came in at 3.4% YoY, versus the predicted 3.4%.
However, Fed officials emphasized that recent economic statistics indicated that economic activity is expanding at a solid rate. While the labor market remains strong. These encouraging data strengthen the prospect of additional rate hikes at the December meeting, which might boost the US dollar for the foreseeable being.
This week will be dominated by the policy meetings of the Bank of Japan and the Federal Reserve. Aside from that, the October ISM Manufacturing PMI and Initial Jobless Claims data for the United States will be issued on Wednesday and Thursday, respectively. The focus will be on Friday, the US Nonfarm Payrolls are predicted to increase by 172K jobs.
