USD/JPY remains depressed around 104.00 amid weaker USD, upbeat Japan data

• USD/JPY wavers around 104.00, lacking a clear directional bias.
• The spot remains split between weaker DXY and better Japanese data.
• The Fed decision eyed for a fresh direction in USD/JPY.

USD/JPY is on the defensive so far this Monday, moving back and forth around the 104.00 level, as markets remain in search of a clear direction heading into this week’s Fed decision.

The spot remains divided between broad-based US dollar weakness on one-hand and improved prospects of Japan’s economic recovery on the other.

The imminent rollout of the coronavirus vaccines in the US after the FDA authorization and a likely US fiscal stimulus deal have boosted the risk inflows across the financial markets this Monday, weighing negatively on the safe-haven US dollar.

Meanwhile, the Japanese business sentiment improved for the second straight month despite the looming coronavirus concerns in the country, the latest survey conducted by the Bank of Japan (BOJ) showed today. The yen markets cheer the signs of strength seen in the post-pandemic economic recovery.

Looking ahead, the spot is likely to maintain its recent range play, awaiting the Fed monetary policy decision due this Wednesday. The Fed is likely to maintain its dovish stance, potentially expanding its asset purchases program to boost the economic turnaround.

USD/JPY technical levels