USD/JPY – The dollar continues to be well-supported by the wide divergence between the Fed’s and the BoJ’s monetary policies

USD/JPY remains steady, though trading in a narrower range on Wednesday, as investors await the FOMC decision later today.

Tuesday’s dip from a three-week high, which interrupted a six-day rally, is likely to be short-lived, as the dollar remains well-supported while the yen continues to face downward pressure due to the wide divergence between Fed and BoJ monetary policies.

The Fed is expected to deliver a 25 basis point rate cut today, viewed by many as a hawkish move due to anticipated slowing of policy easing in 2025, diverging from previous expectations, while Japan’s policymakers are expected to maintain their current interest rate at the upcoming meeting on Thursday.

The bullish technical outlook on the daily chart supports a positive outlook for the dollar, with the upward move underpinned by a rising thick daily Ichimoku cloud, multiple bullish moving average crossovers, and positive momentum.

A firm break above the Fibo barrier at 153.65 (61.8% retracement of the 156.74/148.64 pullback) would confirm a fresh bullish signal, opening the way for further gains towards 154.83 (76.4% Fibo) and 156.74 (Nov 15 peak).

Res: 154.47; 154.83; 155.88; 156.74
Sup: 153.16; 152.87; 152.69;  152.30