USD/JPY edged higher on Tuesday as last week’s AI-driven risk unease faded, reducing the Yen’s safe-haven demand and supporting a firmer US Dollar ahead of key central bank meetings. The pair traded near 157.85 after touching 156.08 on Friday, while the US Dollar Index rose to around 102.23 after dipping to 101.45 last week. Market focus now turns to the Federal Reserve’s decision on Wednesday and the Bank of Japan’s on Friday, with positioning shaped by expectations that both will keep policy settings steady.
Federal Reserve Rate Outlook And U.S. Data
The Fed is expected to hold rates after a 25 bps rise in September took the target range to 3.75%–4.00%, and attention will be on the statement and Chair Kevin Warsh’s press conference; futures imply an 80% probability of a December hike. US data were mixed: Durable Goods Orders increased 1.8% in September versus 0.6% expected, but orders excluding transportation rose 0.5% against a 0.6% forecast, core capital goods orders slowed to 0.5% from 1.6%, and ADP’s four-week average eased to 16.8K from 17.5K.
Bank Of Japan Policy Expectations
The BoJ is also seen keeping rates unchanged after 50 bps of tightening this year, with a December move also 80% priced.
