USD/JPY Coils Just Above 149.00 Prior to Action by the BoJ and Fed
The USD/JPY had a difficult week due to the BoJ and Fed in the crosshairs. It was widely expected that the Bank of Japan would abandon negative interest rates. Wednesday, the Fed will update the Dot Plot of interest rate expectations.

The USD/JPY is producing chart material just above the 149.00 handle as investors prepare for a week heavy on central banks. Early in the Tuesday morning trading session, the Bank of Japan (BoJ) is anticipated to provide an update on its negative interest rate regime, following the announcement of the highest wage increases in over three decades during Japan's spring wage negotiations. This week is also anticipated from the Federal Reserve (Fed), which is scheduled to release its most recent Dot Plot summary of interest rate projections on Wednesday.
It was extensively communicated by the Bank of Japan that any interest rate adjustments would be contingent on the outcome of spring wage negotiations in Japan. This year, union-negotiated compensation increases surpassed 5%, the highest level in 31 years. The market has placed significant emphasis on anticipated interest rate increases from the Bank of Japan (BoJ), and Nikkei news service unconfirmed reports assert that the BoJ has already reached an internal consensus to increase rates to a range of 0.0–0.1%. The current primary reference rate for Japan is approximately -0.1%. The BoJ is anticipated to release its most recent rate decision early Tuesday morning.
The latest rate announcement by the Federal Reserve is scheduled for Wednesday, and it will be followed by an additional press conference featuring Fed Chairman Jerome Powell. Additionally, the Dot Plot summary of interest rate projections will be revised by the Fed. Increasingly, rate-cutting markets are concerned that the Federal Reserve will reduce expectations for further rate cuts. The median forecast of three rate cuts through 2024, amounting to approximately 75 basis points in rate reductions by the end of the year, was presented in the Fed's most recent Dot Plot. The money markets entered 2024 anticipating a staggering one-seventh or six rate decreases, in total value of 175–200 basis points.
As the US economy demonstrates greater resilience than anticipated by rate observers and US inflation continues to be more persistent than anticipated, rate futures markets have been severely depressed, with rate expectations declining to align with the Fed's Dot Plot in March. The CME's FedWatch Tool indicates that as recently as last week, markets had already factored in odds of a first rate cut by the Fed in June by nearly 70%. The probabilities have decreased to approximately 50-50 as of Monday.
The latter part of the trading week will see the release of US Purchasing Manager Index (PMI) data, Japanese Trade Balance figures on Thursday, and Japanese National Consumer Price Index (CPI) follow-up inflation figures early Friday.
Bonus rebate to help investors grow in the trading world!