The USD/JPY pair trades just above the 109.00 figure, losing its bullish potential. The upcoming direction will depend on the US Federal Reserve which will announce its monetary policy decision this Wednesday, Valeria Bednarik, Chief Analyst at FXStreet, reports.
Key quotes
“The US Federal Reserve is not expected to introduce changes to the current policy as the employment sector is way below its pre-pandemic levels.”
“In a speech not so long ago, head Powell suggested that bond yields volatility is not a concern for policymakers, neither a factor to decide a change in the monetary policy. Any change of view in this matter could spur wild volatility across the FX board.”
“A steeper decline could take place if the pair breaks below 108.80, although it all depends on the Fed and how government bond yields react afterwards.”
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