USDJPY receives new buying and is supported by a number of reasons.

The USDJPY pair regains positive momentum during the Asian session. On Tuesday, snapping a two-day losing skid to the 148.80 region. Or a two-week low reached the day before. After the Bank of Japan (BoJ) published its policy decision. Buying demand increased, driving spot prices to the 150.00 psychological level, or a new daily high in the last hour.

The USDJPY has weakened when the Bank of Japan modified its wording around YCC while maintaining ultra-low interest rates.

The Japanese central bank avoided changing its yield curve control (YCC) policy. But adjusted terminology around the benchmark 10-year yield target range. The Bank of Japan decided to preserve the yield objective but set a reference cap of 1%. The move follows pressure from a bond market sell-off in October. Which sent the 10-year JGB yield to a 10-year high earlier this Tuesday. Despite an increase in Japanese inflation, the Bank of Japan maintained its ultra-low interest rates. This continues to put pressure on the Japanese yen (JPY) and supports the USDJPY pair.

Hawkish Fed predictions, combined with higher US bond yields, aid in reviving USD demand.

The US Dollar (USD), on the other hand, attracts some dip-buying and recovers some of the overnight loss as US Treasury bond yields rise, bolstered by anticipation that the Fed will raise interest rates. The Federal Reserve (Fed) will maintain its current hawkish attitude. Indeed, markets are certain that the US Federal Reserve would tighten monetary policy further in response to the strong economy and persistently high inflation. This means that the USDJPY pair’s path of least resistance is to the upside, though bulls may want to wait for BoJ Governor Kazuo Ueda’s post-meeting presser before placing further wagers.

The market’s attention will next shift to the US economic calendar. Which includes the release of the Chicago PMI and the Conference Board’s Consumer Confidence Index. Both of which are scheduled for later in the early North American session. The attention, however, will remain on the outcome of the FOMC’s highly anticipated two-day monetary policy meeting. Which is due to be released on Tuesday. Wednesday. Investors will be looking for clues regarding the Fed’s future rate hike path, which will play a crucial role in shaping near term USD price dynamics and determining the next leg of the USDJPY pair’s directional move.