USD/JPY tumbles to lows near 101.70, Fed, BoJ on sight

The greenback remains on the defensive vs. its main rivals on Monday, with USD/JPY now dropping to daily lows in the vicinity of 101.70.

USD/JPY in multi-day lows

The pair is navigating the area of multi-day lows, reverting last Friday’s advance ahead of key FOMC and BoJ meetings later in the week.

Spot keeps the narrow range and the choppy trade so far, all against the backdrop of a potential rate hike by the Fed later in the week (probability at 12%) and divided bets on the likeliness of further easing by the BoJ.

In view of strategists at BTMU, “Our sense is that market expectations of a shift away from a stringent asset purchase target is most likely but ultimately a decision on Wednesday to keep policy unchanged will merely reinforce the belief in the market that the BoJ is running out of options and the short-term response will be a further lift for the yen”.

USD/JPY levels to consider

As of writing the pair is losing 0.43% at 101.84 facing the immediate support at 101.18 (low Sep.7) ahead of 99.53 (low Aug.16) and then 99.08 (low Jun.24). On the other hand, a breakout of 102.62 (55-day sma) followed by 103.36 (high Sep.14) and finally 104.33 (high Sep.2).