On Monday, the USD/JPY currency pair started the week with a sizable swing to the downside during the Asia session. It encountered stiff opposition just under the 150.00 level. Market participants were betting on the next Bank of Japan (BoJ) meeting to turn out to be a game changing event. They were responding to the US Dollar’s weakening, doing their part to drive it down.
The USD/JPY currency pair formed resistance at the 150.00 level, unable to breach this psychological figure in early Monday trading. This development comes as investors closely monitor the BoJ's next meeting, expected to provide critical insights into Japan's monetary policy direction. So far, the expectation of this very ‘live’ meeting has been the key to putting a lid on the pair’s recent march upward.
Strongly contributing to the downward pressure on USD/JPY is the significantly weakening US Dollar. Recent economic data alongside political uncertainty have weighed on a softer greenback, driving up investors’ interest toward alternative currencies.
The pair has recently seen a lot of influential commentary from Japanese Finance Minister Kato and BoJ policymaker Uchida. Their comments have given further context to the counter-inflationary direction of Japan’s economic strategy, which is weighing on market sentiment.
The pair is being weighed down by robust Australian Manufacturing PMI. The robust performance of Australia's manufacturing sector has bolstered the Australian Dollar, contributing further to the USD/JPY's decline.