USD/JPY Pauses at 156.00 Ahead of BoJ Rate Decision
The USD/JPY pair has snapped its three-day winning streak and is now trading at around 156.00 as market participants await the highly anticipated Bank of Japan rate decision on Friday.
Expectations are that the BoJ will raise its benchmark interest rate by 25 basis points to a 31-year high of 1.25% at the end of the September policy meeting, with some traders pricing in a follow-through up move in December amid inflation risks.
This has provided support to the Japanese Yen and weighed on the USD/JPY pair, despite the US Dollar touching a fresh high since late July following the Federal Reserve's hawkish rate hike on Wednesday.
The escalating Middle East tensions have also contributed to limiting the downside for the USD/JPY pair, with oil-driven inflation fears underpinning prospects for further Fed tightening and supporting the safe-haven buck.