USD/JPY bounces off 101.50, eyes on BoJ, Fed

The continuation of the offered bias in the buck has dragged USD/JPY to test fresh lows in the mid-101.00s today, just to rebound to the 101.75/70 band afterwards.

USD/JPY attention to BoJ, Fed

The recent appreciation of JPY will come under pressure at the BoJ meeting tomorrow. Market scepticism on the ability of the central bank to tackle deflationary pressures have been on the rise in recent weekks, ultimately lending extra support to the safe haven.

In addition, and with prospects of the Fed staying put at tomorrow’s meeting, the bar for the BoJ to weaken the Yen seems to be quite high, prompting the need to really surprise the markets tomorrow with a more credible easing package.

USD/JPY levels to consider

As of writing the pair is losing 0.22% at 101.71 facing the immediate support at 101.18 (low Sep.7) ahead of 99.53 (low Aug.16) and then 99.08 (low Jun.24). On the other hand, a breakout of 102.63 (55-day sma) would open the door to 103.36 (high Sep.14) and finally 104.33 (high Sep.2).