Bank of Japan's Hawkish Stance Signals Confidence in Inflation Goal
The USD/JPY slipped slightly on Monday, with the Bank of Japan's upcoming policy decision and US economic indicators driving near-term trends. Expectations of a dovish BoJ and better-than-expected US service sector activity could drive demand for the USD/JPY, while a fall through the 147.500 handle would bring the 146.649 support level into play. The Bank of Japan is expected to leave interest rates unchanged, but tweaks to the yield curve control policy and forward guidance on economic outlook and inflation will be closely watched. Additionally, the US private sector PMIs and inflation data will influence the currency pair's movement.