Later in the session on Monday, FOMC members’ speeches will require attention following Friday’s Personal Income and Outlays Report.
Calls to delay rate cuts in response to a pickup in inflationary pressures could send USD/JPY toward the 200-day Exponential Moving Average. On the other hand, rising concerns about a cooling labor market could fuel speculation about multiple Fed rate cuts, pushing the pair below the 50-day EMA. If breached, 146 would be the next key support level.
The USD/JPY remains exposed to the possibility of the BoJ and the Fed diverging on monetary policy, potentially fueling USD/JPY volatility.
USD/JPY: Key Scenarios to Watch
Bearish USD/JPY Scenario: Hawkish BoJ rhetoric, stronger Japanese Manufacturing PMI, or dovish Fed cues could push USD/JPY toward 145.
Bullish USD/JPY Scenario: Dovish BoJ signals, softer Japanese data, or hawkish Fed signals may drive the pair toward the 150.
