As traders eagerly await US CPI, USDJPY maintains a defensive stance and stands above 146,000
The USDJPY faces some selling pressure on Thursday due to a small USD decline. The Fed-BoJ policy difference should act as a tailwind and assist the pair in limiting losses. Also hesitant, traders prefer to await the release of the critical US CPI report.

The USDJPY pair struggles to capitalize on yesterday's decent bounce from the 145.15-145.10 support zone, or a nearly two-week low, and faces a new supply on Thursday. During the early European session, the pair stays on the defensive and is currently trading at the daily low, slightly above the 146.00 round number.
A minor decline in the U.S. dollar, accompanied by repositioning activity ahead of major U.S. macroeconomic data, proves to be a driving force behind some USDJPY selling. The downside remains cushioned, though, as traders are unwilling to put aggressive bets ahead of Thursday's release of the latest US consumer inflation data. The vital US CPI report will play an important part in deciding the Fed's policy tightening path, which should influence the near-term USD price dynamics and provide a fresh push to the major's direction.
The markets continue to price in the prospect of a December rate hike of at least 50 basis points. In contrast, the Bank of Japan has not shown any desire to increase interest rates as of yet. In addition, the BoJ maintains committed to keeping the yield on 10-year bonds at 0%. Governor Haruhiko Kuroda of the Bank of Japan reaffirmed on Thursday that the central bank must continue to support a weak economic recovery with loose monetary policy. Kuroda noted that economic uncertainty is quite high and that, if necessary, negative interest rates can be reduced further.
This represents a significant difference compared to a more hawkish Federal Reserve and boosts the likelihood of USDJPY purchasing. In addition, the fact that the BoJ governor dismissed hopes for a direct intervention in the foreign exchange market to protect the native currency lends validity to the optimistic slant. Consequently, any future decline may continue to attract some purchasers and is likely to be limited, at least for now. However, a decisive breach below the psychological level of 145.00 would render the optimistic perspective invalid.
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