USD/JPY treading beyond 111.00 on quiet markets for Wednesday

• The Dollar-Yen sees soft gains for Wednesday as a thin calendar has traders already looking forward to next week’s BoJ meeting.
• Tokyo CPI is also due later in the week, but with the BoJ around the corner, effect could be muted.

The USD/JPY is trading smoothly near 111.30 as a quiet Asia session for Wednesday nears the end.

Broader market sentiment remains fairly balanced for the mid-week, with risk appetite splitting right down the middle on the USD/JPY, which is seeing a mild bounce from yesterday’s low just beneath the 111.00 major handle.

It has been a notably quiet week for the USD/JPY thus far, but Yen traders are already turning their eyes to the upcoming Bank of Japan (BoJ) monetary policy meeting next week, which most traders are anticipating to come out bullish for the JPY, though the BoJ isn’t expected to make any changes to its monetary policy quite yet.

USD/JPY Levels to watch

According to FXStreet’s own Valeria Bednarik, prices are finding near-term support at key points, which could drive bulls to take more steps higher: “in the 4 hours chart, the 100 SMA stands flat a few pips above the mentioned Fibonacci level, while the 200 SMA continues providing a short-term support at around 110.80. The Momentum indicator in the mentioned chart recovers within negative levels, but the RSI lacks directional strength around 36, all of which limits chances of a steeper advance, at last as long as selling interest keeps capping advances in the 111.40/50 region. Below the 110.70/80 price zone, the pair will likely resume its decline, with scope then to test the 110.00 level.:

  Support levels: 110.75 110.35 110.00

Resistance levels: 111.50 111.85 112.20