USD/JPY pulls back from two-week high, trades with modest losses below mid-141.00s

USD/JPY pulls back from a two-week high and is pressured by a combination of factors.
A modest pickup in demand for the JPY weighs on the pair amid subdued USD demand.
The downside seems cushioned ahead of the FOMC and BoJ policy meetings this week.

Haresh Menghani FXStreet

The USD/JPY edges lower on the first day of a new week and erodes a part of Friday's strong gains to the 142.00 neighbourhood, or a nearly two-week high. Spot prices remain on the defensive through the Asian session and currently trade just below mid-141.00s, down around 0.30% for the day.

The Japanese Yen (JPY) attracts some buyers in reaction to comments by Japan's top currency diplomat Masato Kanda, saying that the recent inflation and wage rises were overshooting expectations. Speaking to reporters this Monday, Kanda added that the data available so far supports prospects for an upgrade in the Bank of Japan's (BoJ) inflation forecasts. This revives hopes that the BoJ might tweak its Yield Curve Control (YCC) policy later this week, which, along with a softer risk tone, underpins the safe-haven JPY and act as a headwind for the USD/JPY pair.

Apart from this, a modest US Dollar (USD) downtick is seen as another factor weighing on the pair, though the downside seems limited ahead of this week's key central bank event risks. The Federal Reserve (Fed) is scheduled to announce the outcome of a two-day policy meeting on Wednesday and is expected to hike interest rates by 25 bps. Moreover, doubts that the Fed will commit to a more dovish policy stance assist the buck to preserve its recovery gains from the lowest level since April 2022 touched last week and should lend support to the USD/JPY pair.

The highly-anticipated FOMC decision will be followed by the latest BoJ monetary policy update on Friday, which will play a key role in determining the near-term trajectory for the major. In the meantime, traders on Monday will take cues from the release of the flash US PMI prints, due later during the early North American session. The data will provide fresh insight into the US economic health, which, in turn, should influence the USD. Apart from this, the broader risk sentiment might also contribute to producing short-term opportunities around the USD/JPY pair.

Technical levels to watch

USD/JPY

Overview
Today last price	141.36
Today Daily Change	-0.46
Today Daily Change %	-0.32
Today daily open	141.82

Trends
Daily SMA20	141.86
Daily SMA50	140.63
Daily SMA100	137.2
Daily SMA200	136.91

Levels
Previous Daily High	141.96
Previous Daily Low	139.75
Previous Weekly High	141.96
Previous Weekly Low	137.68
Previous Monthly High	145.07
Previous Monthly Low	138.43
Daily Fibonacci 38.2%	141.11
Daily Fibonacci 61.8%	140.59
Daily Pivot Point S1	140.39
Daily Pivot Point S2	138.97
Daily Pivot Point S3	138.18
Daily Pivot Point R1	142.6
Daily Pivot Point R2	143.38
Daily Pivot Point R3	144.81

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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