USD/JPY inter-markets: volatile days ahead?

After staging a goodish recovery from sub-100.00 level touched in mid-August, the USD/JPY pair seems to have lost its upside momentum and is now reversing some of its recovery gains to currently trade 103.30 region. 

Uncertainty over the timing of next Fed rate-hike action and the pace of rate increases has been weighing on the greenback, with the pair failing to build on to Tuesday's tepid recovery gains to 103.80 level. Tuesday's reversal from session high was accompanied by a drop in Fed rate-hike expectations and was accompanied by a slide in the US and Japanese 10-years Treasure bond yields. 

Moreover, BOJ Governor Haruhiko Kuroda failed to provide any strong clues over the central bank's future monetary policy stance at the G-20 meeting in China on Monday. The lack of clarity surrounding BOJ's plans to ease its monetary policy further led the pair to trade with negative bias on Monday. 

The pair has even failed to benefit from prevalent risk-on sentiment as depicted by the Volatility Index (VIX), which has been at suppressed level for quite some time now. Lower volatility tend to drive investors away from traditional safe-haven currency, the Japanese Yen, and should have provided some additional boost to the pair. 

With both the Federal Reserve and BoJ scheduled to announce their respective monetary policy decisions later during the month, traders would continue to reposition themselves ahead of the big event risk and could eventually infuse a fresh bout of volatility around the USD/JPY pair.

From technical perspective, 50-day SMA resistance break-point remains immediate support to watch for, which if broken might negate possibilities of any further up-move and turn the pair vulnerable to extend its downward trajectory in the near-term.