USD/JPY Rangebound Ahead of BOJ Rate Decision

The USD/JPY currency pair has been trading in a narrow range near 163.50, with the yen retreating slightly after strengthening in the previous session.

This comes as the dollar declined modestly following the Federal Reserve's decision to keep interest rates unchanged, despite three FOMC members voting in favor of a rate hike.

However, Fed Chairman Kevin Warsh stressed that the pause should not be interpreted as a rejection of further policy tightening, and future decisions will continue to be data-dependent.

The Bank of Japan is also expected to keep rates unchanged on Friday but may signal that further hikes remain possible to contain the yen's decline.