Ella 
During early trading in Asia on Wednesday, USD/JPY remained range-bound. Traders tend to wait and see before the Federal Reserve (Fed) announces its interest rate decision on Wednesday, with the Fed expected to keep interest rates unchanged in the 5.25%-5.50% range. USD/JPY is currently trading around 147.75, down 0.08% on the day.
Japan’s trade balance in August was 930.5 billion yen, below expectations of 659.1 billion yen, the latest data from the Ministry of Finance showed on Wednesday. The annual import rate rose to -17.8% from -13.6%, better than the -19.4% forecast.
Earlier on Wednesday, Japan’s top monetary diplomat, Masato Kanda, issued a verbal intervention. Kanda said that Japanese authorities are properly handling foreign exchange trends with a high sense of urgency.
Additionally, the Bank of Japan (BOJ) will announce an interest rate decision on Friday. The Bank of Japan is widely expected to maintain its short-term interest rate target of -0.1% and its 10-year bond yield target of around 0%. The market is waiting to see whether Bank of Japan Governor Kazuo Ueda will provide any new signals on the timing of policy actions and further adjustments to the yield curve control (YCC) at the post-meeting press conference.
In the United States, the Federal Reserve (Fed) is scheduled to announce a two-day monetary policy meeting on Wednesday, with the Fed widely expected to keep interest rates in a range of 5.25% to 5.5%. This could therefore weigh on the US dollar and be negative for the USD/JPY pair. On the data front, U.S. housing industry data for August were mixed. Data released Tuesday by the U.S. Census Bureau showed U.S. housing starts fell 11.3%, while building permits surged 6.9%.
Next, traders will pay close attention to the Federal Reserve meeting resolution to be announced at 2:00 Beijing time on Thursday. On Friday, the Bank of Japan will announce its monetary policy decision. These events can trigger market volatility and provide direction for the USD/JPY pair.
