USD/JPY most definitely in the spotlight this week as Fed and BOJ await

Very early on Thursday morning, sometime around 5.30am GMT the Bank of Japan is due to release its final monetary policy decision of the year. There is some doubt as to whether or not this will deliver another rate increase. That doubt was eased to a large degree last week, following comments and reports form unnamed officials; that the BOJ is likely to wait and keep the current 0.25% OCR in place. It was that shift which helped to lift the USD/JPY from below 150 on Monday, to as high as 153.80 ahead of the close on Friday. The dollar closed in the US on Friday near the top of that range, at 153.65. The rebound in US yields over the course of the week was a key driver behind that move too. So, we have the prospect of a Fed cut on Wednesday and the outside chance of a BOJ hike the very next day. If that transpires, then it is hard to imagine the USD/JPY will not be lower. It looks likely the Fed will cut by 0.25% on Wednesday evening though and that is kind of priced in right now. As things stand, it seems the markets are erring on no change the next day from the BOJ. Hence, the USD/JPY is most definitely in play this week folks and we are going to see some price action for sure, especially if that is not the case. The USD/JPY has lifted a little higher today and the range overnight ahead of the European opening today has been covered by 153.33 to 153.97. It is currently trading at 153.66