USD/JPY Range-Bound Amid Fed-BOJ Tug-of-War

The USD/JPY currency pair is stuck in a tight trading range between 148 and 151 as of mid-March 2025, waiting for fresh macroeconomic signals from both the Federal Reserve and the Bank of Japan.

Investors are holding back on large positions due to conflicting rate expectations and geopolitical uncertainty. The Fed's potential for prolonged high interest rates supports the US dollar, while the Bank of Japan's possible normalization of its ultra-loose monetary policy supports the yen.

A clear catalyst could come from upcoming US economic data, particularly the Consumer Price Index (CPI) report due later this month. A hotter-than-expected reading could strengthen the dollar and push USD/JPY above its recent ceiling.