Japanese Yen holds as traders switch focus to BoJ hike and Warsh’s first Fed meeting

• USD/JPY trades near 160.20 as the JPY remains slightly pressured ahead of next week’s BoJ policy decision.
• Rising expectations of a BoJ rate hike may not be enough to support the Yen if officials avoid talk of further tightening.
• The Fed meeting will also be in focus as Kevin Warsh chairs his first FOMC.

The USD/JPY pair trades near the 160.20 region on Friday as the Japanese Yen (JPY) remains slightly under pressure, while investors prepare for a key central bank week featuring the Bank of Japan's (BoJ) policy decision and Kevin Warsh’s first Federal Reserve (Fed) meeting as Chair.

The Yen continues to struggle despite rising expectations that the BoJ could raise interest rates next week. However, the move may not be enough to provide sustained support for the Yen if the BoJ avoids providing strong guidance on further tightening.

The upcoming FOMC meeting will be closely watched as newly appointed Fed Chair Kevin Warsh takes the reins, with traders focusing on the statement, projections, and press conference for signs of whether the Fed could maintain a hawkish stance later this year.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 160.21. The pair is holding above the 100-period Simple Moving Average (SMA) at 159.72, but it remains capped just under the 20-period SMA near 160.35, keeping the near-term tone broadly neutral with a slight topside constraint. The Relative Strength Index (RSI) around 49 underscores this consolidative stance, suggesting waning upside momentum after the recent pullback.

On the topside, initial resistance is aligned at 160.34, with the 20-period SMA at 160.35 and a higher horizontal barrier at 160.38 forming a tight supply zone that bulls must clear to reopen a stronger advance. On the downside, immediate support emerges at 160.17, ahead of a firmer floor at 159.96, while the 100-period SMA at 159.72 is positioned as a deeper dynamic support level in case selling pressure extends.

(The technical analysis of this story was written with the help of an AI tool.)