USD/JPY HOLDS NEAR 159.50 AS BOJ RATE EXPECTATIONS STAY ELEVATED AHEAD OF FOMC MINUTES
USD/JPY traded around 159.50 during Tuesday’s Asian session, with the Japanese Yen remaining near its weakest level in roughly two weeks as markets weigh expectations for further Bank of Japan tightening against softer domestic growth.
According to MUFG analysts, market pricing implies around an 80% probability of a 25-basis-point BoJ rate increase in September. The BoJ currently holds its policy rate at 1.00%, while its latest Summary of Opinions showed that several board members continue to consider further monetary tightening.
Japan’s preliminary second-quarter GDP expanded 0.3% quarter-on-quarter, below the 0.5% market forecast and the 0.5% growth recorded in Q1. Brown Brothers Harriman noted that growth was supported by net exports (+0.5 percentage points), government consumption (+0.3 points) and private inventories (+0.3 points), highlighting the importance of growth composition when assessing the BoJ outlook. This remains an institutional assessment rather than a confirmed policy outcome.
Attention also turns to Wednesday’s FOMC Minutes from the July meeting, when the Federal Reserve kept rates unchanged at 3.50%–3.75%. The Minutes may provide further insight into policymakers’ views on inflation, economic conditions and the future rate path.
Technically, USD/JPY trades near 159.51, with the 14-day RSI at 44.70. The nearest upper references are 159.64 and 160.67, followed by broader levels at 162.14 and 164.01. On the lower side, 158.61 and 157.33 remain the key technical references.
Market participants will continue to monitor BoJ rate expectations, Japan’s economic data and the FOMC Minutes, with the 158.61–160.67 area remaining an important near-term technical range for USD/JPY.
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