USD/JPY struggles to gain any meaningful traction, stuck in a range around 148.00 mark

The USD/JPY pair struggles to gain any meaningful traction and oscillates in a narrow band through the first half of trading on Wednesday. The pair is currently placed just above the 148.00 mark and remains well within the previous day's broader trading range.

The US dollar languishes near a three-week low and turns out to be a key factor acting as a headwind for the USD/JPY pair. The softer US macro data released on Tuesday pointed to signs of a slowdown in the world's largest economy and might force the Federal Reserve to its hawkish stance. This led to a further decline in the US Treasury bond yields, which continues to weigh on the greenback.

The Japanese yen, on the other hand, draws support from the recent currency market intervention by the government. Apart from this, a softer tone around the equity markets offers additional support to the safe-haven JPY. That said, a bid divergence in the policy stance adopted by the US central bank and the Bank of Japan helps limit the downside for the USD/JPY pair, at least for the time being.

The Fed is still expected to hike interest rates by 75 bps in November and continue with its policy tightening path, albeit at a slower pace. The BoJ, on the other hand, remains committed to its ultra-loose monetary policy settings. This, in turn, suggests that the path of least resistance for the USD/JPY pair is to the upside, though bulls seem reluctant ahead of the BoJ meeting on Thursday.

Heading into the key central bank event risk, reluctance to place aggressive bets could lead to an extension of the USD/JPY pair's range-bound price action. Market participants now look to the US New Home Sales data for some impetus later during the early North American session. This, along with the US bond yields, and the broader market risk sentiment might influence the major.

Technical levels to watch