Ella 
USD/JPY struggled to gain significant momentum on Wednesday, trading within a narrow range throughout the Asian session. USD/JPY is currently hovering around the 149.00 mark, just below the highest level since October 2022 hit on Tuesday, with little movement following the release of the Bank of Japan (BOJ) policy meeting minutes.
Policymakers agreed that the Bank of Japan must maintain the current monetary easing policy to achieve price targets stably and sustainably. At the same time, several members pointed out the downside risks facing the Japanese economy. Japanese prices are mainly affected by overseas developments. Previously, Bank of Japan Governor Kazuo Ueda gave a speech earlier this week, reiterating that the central bank is more likely to adhere to an ultra-loose monetary policy stance in the near future. In addition, the Federal Reserve (Fed) indicated that it may raise interest rates at least once before the end of this year, which has stabilized the US dollar near the highest point of the year and became a “tailwind” for the US dollar/yen currency pair.
In fact, the Fed reiterated last week that interest rates will remain higher for longer while U.S. inflation remains elevated. In addition, investors are now increasingly wary of the possible inflationary impact of rising oil prices. In addition, U.S. macro data remaining resilient also supports the prospect of further tightening by the Federal Reserve. Meanwhile, the Fed’s hawkish outlook remains supportive of rising U.S. bond yields, which continues to boost USD/JPY. However, speculation that the Japanese authorities will intervene in the foreign exchange market to support the rise of the local currency continues.
Traders also appeared to be inactive, preferring to wait and see Federal Reserve Chairman Jerome Powell speak on Thursday. In addition, investors will also receive important U.S. macro data this week, including durable goods orders due later on Wednesday, final second-quarter gross domestic product due on Thursday and Friday’s Core PCE price index. This in turn will therefore have a key impact on USD price dynamics and provide some significant thrust to USD/JPY. Meanwhile, the above-mentioned fundamental backdrop seems firmly tilted towards bullish traders and suggests that resistance to the upside for USD/JPY remains minimal.
