Before Fed-BOJ interest rate policy, USD/JPY falls within the woods

The USD/JPY pair has encountered obstacles while attempting to surpass the 144.00 round-level resistance. The attempt was also intended to break the long-week consolidation between 142.55 and 143.80 to the upside. A failure in the breakout of the same has pushed the pair back into the woods, and a lackluster performance is anticipated from the asset in the near future.

The probable catalyst for Wednesday will be the Federal Reserve's interest rate decision (Fed). The central bank is anticipated to implement a third consecutive rate increase of 75 basis points (bps). However, the room for a larger-than-anticipated rate hike remains vast, as retail demand is robust and labor market conditions are exceptionally tight. Consequently, wagers on a one percent rate hike are increasing and may prove profitable.

In addition, the outlook for economic growth, interest rate peak, and inflation rate will be closely monitored. The markets have discounted all potential decisions that the Fed could make. After the Fed meeting, investors will prepare for additional decisive action.

On the Tokyo front, an improvement in Japan's National Consumer Price Index (CPI) statistics has increased the likelihood of the Bank of Japan shifting its policy stance (BOJ). The National CPI was reported at 3% by the Statistics Bureau of Japan, which was higher than both the projections and the previous release of 2.6%. In addition, the core CPI, which excludes food and energy costs, has increased to 1.6% from 1.2%, but remains below predictions of 1.7%.