USD/JPY Reclaims Early Gains as Markets Await Fed and BoJ Policy Decisions

USD/JPY Stabilizes Around 144.15 as Dollar Momentum Fades

The USD/JPY pair retreated from its early rally on Monday, settling near 144.15 during the European session. The move reflects cautious trading ahead of this week’s key monetary policy decisions from both the Federal Reserve (Fed) and the Bank of Japan (BoJ).

The US Dollar Index (DXY) also slid to 98.00, reversing Friday’s strength and contributing to pressure on the pair.

Monetary Policy in Focus: No Surprises Expected

Both the BoJ and Fed are widely expected to keep rates unchanged. Policymakers from both central banks have emphasized that any policy adjustments will depend on more clarity around economic performance during President Trump's term, including inflation trends and employment stability.

Despite strong labor data and resilient inflation in the US, the Fed remains cautious. Meanwhile, the BoJ is not ready to tighten policy further, prioritizing economic support.

Safe-Haven Appeal Weakens

Although the Japanese Yen is typically a safe-haven asset, its appeal has diminished as geopolitical tensions ease slightly. With markets pricing in a “wait and see” stance from both central banks, volatility in USD/JPY may remain subdued until midweek.

Quick Facts:

• USD/JPY current level: 144.15
• US Dollar Index (DXY): 98.00
• BoJ and Fed decisions expected: No rate changes
• Market mood: Neutral to slightly risk-on

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