USD/JPY: buyers wait for the Fed
During the last week USD/JPY rose to 122.00, but failed to hold there. Traders are focused on the meeting of the Federal Reserve which will take place on Wednesday, March 18. They don’t hurry to buy American currency wanting the confirmation that the first rate hike is coming soon. Demand for the greenback is also limited by the repatriation flows of the Japanese companies' overseas earnings ahead of the nation’s fiscal year end on March 31.
The Bank of Japan’s meeting is scheduled on Tuesday. The central bank is expected to leave policy unchanged. On Wednesday the nation will release trade balance figures. On Friday Japanese central bank will publish the minutes of its previous meeting. Still, events in the US will be decisive for the pair.
Technically there room for correction to 120.00 and 119.40. In case of the break to the upside, USD/JPY will likely be limited by 124.00 handle. There will be local elections in Japan in April. As weak yen is hurting small firms and consumers, Japanese authorities would want to contain the advance of dollar/yen.