USD/JPY Range-Bound as Yen Strengthens Amid Fed Hike Bets

The USD/JPY exchange rate hovered near 157.50 on Tuesday as the yen maintained its strength while a broadly stronger US dollar limited gains.

This stability comes amidst expectations of further Federal Reserve rate hikes, with the US Dollar Index trading near 100.60, close to levels last seen in late July.

The pair saw some volatility following the Bank of Japan's policy update on Friday, rising to 158.05 before slipping back towards 157.00 due to reports that the BoJ conducted a rate check during the New York session.

Despite this, resistance lies ahead at key moving averages, with support near 155.50 and then 153. Trading strategies for a range-bound environment suggest utilizing short-term iron condors or range-bound option spreads.