The USD/JPY pair is holding steady around 157.00 as the US Dollar strengthens ahead of the Federal Reserve’s policy announcement. Traders are scaling back their bets on a Fed rate cut after a strong US Nonfarm Payrolls report for May showed strong labor demand and wage growth.
The Bank of Japan is expected to further ease its policy by reducing its asset purchases. The market is now focused on the upcoming US Consumer Price Index data and the Fed’s interest rate decision.
Investors anticipate the Fed to keep interest rates unchanged and provide a hawkish outlook. There is a shift in market sentiment towards risk aversion as investors believe the Fed may delay rate cuts until later in the year.
In Tokyo, attention is on the Bank of Japan’s monetary policy decision, with expectations for further policy easing through reduced bond purchases.