USD/JPY Slides Ahead of Fed Rate Hike Decision

The USD/JPY pair has retreated from its earlier high of 155.50 in the European trading session on Wednesday, as market participants await the Federal Reserve's (Fed) monetary policy decision at 18:00 GMT.

Analysts expect the Fed to hike interest rates by 25 basis points (bps) to 3.75%-4.00%, with an over 90% chance of this happening, according to current market expectations.

The BNY analysts believe that while a rate hike is expected on Wednesday and possibly another one later in the year, the path to even higher policy rates is uncertain due to potential impediments.

The Bank of Japan's (BoJ) policy decision on Friday is also closely watched, with investors expecting a 25 bps interest rate hike to 1.25%.