Japanese Yen remains depressed near one-week low vs USD as traders await Fed, BoJ
- USD/JPY advances to a one-week high on Wednesday, though it lacks follow-through buying.
- USD bulls pause for a breather ahead of the Fed decision and cap the upside for spot prices.
- A more hawkish BoJ repricing helps limit deeper JPY losses and further keeps a lid on the pair.
The USD/JPY pair attracts some buyers for the third straight day and touches a one-week high, around the 155.45-155.50 region, during the Asian session on Wednesday. Spot prices, however, lack follow-through as traders seem hesitant ahead of the key central bank event.
The US Federal Reserve (Fed) concludes its September policy meeting today and is widely expected to raise interest rates by 25 basis points (bps). Investors, however, will keep a close eye on updated economic projections, which include the so-called dot plot, and Chair Kevin Warsh's remarks during the post-meeting press conference for more cues about the future policy path. The outlook, in turn, will play a key role in influencing the US Dollar (USD) and provide some impetus to the USD/JPY pair.
The immediate market reaction, however, is more likely to remain limited amid a more hawkish repricing of the Bank of Japan's (BoJ) normalization path. In fact, traders now seem to have fully priced in a 25 bps rate hike at the end of a two-day meeting on Friday and see a greater possibility of a follow-up move in December. This, in turn, might hold back bearish traders from placing aggressive bets on the Japanese Yen (JPY) and keep a lid on any meaningful appreciating move for the USD/JPY pair.
Meanwhile, investors remain worried about energy-driven inflation risks, which underpin prospects for further tightening by the Fed. Adding to this, a surge in public and corporate borrowing led to an extended global bond selloff, pushing the yield on the benchmark 10-year US Treasury bond beyond the 5% threshold for the first time since 2023 and to its highest level since 2007. This, along with geopolitical risks, might continue to underpin the Greenback and act as a tailwind for the USD/JPY pair.
USD/JPY 4-hour chart
Technical Analysis
The USD/JPY pair holds well above the 23.6% Fibonacci retracement and maintains a constructive bullish intraday bias. The 38.2% Fibonacci level at 155.65 marks the first upside hurdle, with the 50% retracement at 156.55 and the 100-period Simple Moving Average (SMA) on the 4-hour chart at 156.81 reinforcing a broader supply zone.
On the downside, initial support is seen at the 23.6% retracement around 154.54, while a deeper pullback toward the Fibonacci anchor near 152.75 would be needed to seriously challenge the prevailing bullish structure on the 4-hour time frame.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.48% | 0.33% | 1.13% | 0.43% | 0.48% | 1.23% | 0.32% | |
| EUR | -0.48% | -0.16% | 0.65% | -0.05% | 0.01% | 0.75% | -0.17% | |
| GBP | -0.33% | 0.16% | 0.84% | 0.11% | 0.17% | 0.92% | -0.03% | |
| JPY | -1.13% | -0.65% | -0.84% | -0.70% | -0.69% | 0.04% | -0.84% | |
| CAD | -0.43% | 0.05% | -0.11% | 0.70% | 0.08% | 0.80% | -0.15% | |
| AUD | -0.48% | -0.01% | -0.17% | 0.69% | -0.08% | 0.75% | -0.18% | |
| NZD | -1.23% | -0.75% | -0.92% | -0.04% | -0.80% | -0.75% | -0.94% | |
| CHF | -0.32% | 0.17% | 0.03% | 0.84% | 0.15% | 0.18% | 0.94% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
