Daily Analysis USDJPY - 26 July 2023

The International Monetary Fund (IMF) has issued a warning about the possibility of higher inflation in Japan and has called on the Bank of Japan (BoJ) to exit its easy-money policy. However, BoJ Governor Kazuo Ueda reiterated on Wednesday that the central bank will maintain its accommodative monetary stance and assured that the long-term yield rate remains stable due to the yield curve control (YCC) policy.

Meanwhile, the Federal Reserve (Fed) is expected to raise interest rates by 25 basis points. Nevertheless, investors have gained some confidence that the US central bank may adopt a more dovish stance in response to a potential downturn in economic activity. As a result, the focus will be on the accompanying policy statement and the press conference by Fed Chair Jerome Powell.

Investors will closely watch for clues about the future path of rate hikes, which will significantly impact the dynamics of the USD price and could provide significant momentum to the USD/JPY pair.

After reaching the 142.00 resistance level the pair is coming back with the next support is around 140.50, followed by the 139.00 area.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00