USD/JPY was little changed around 158.00 in early European trade on Monday as traders pared Federal Reserve rate-hike expectations despite firmer US inflation. Japan’s national CPI data due on Friday is in focus. Bank of Japan Governor Kazuo Ueda said underlying inflation is “quite close” to the 2% target, citing a tight jobs market and strong global AI demand, and he indicated that moving rates up at an appropriate pace could help avoid sharp rises in bond yields. Markets broadly expect the BoJ to keep the policy rate at 1.25% while leaving scope for a move to 1.5% as early as December, with the next meeting ending on 30 October 2026.
Central Bank Policy Developments
At the IMF annual meetings in Bangkok on Friday, Fed Chair Kevin Warsh gave no guidance on the policy outlook. Fed funds futures imply an 83.9% probability of unchanged rates at the next two-day meeting on 28 October. Separately, one gauge put Ueda’s remarks at 7/10 versus a 7.4/10 average.
Technical Analysis and Key Levels
In technical terms, USD/JPY remains below the 100-day SMA, with the RSI at 52.35; resistance is seen near 158.85 and 159.45, while support sits around 158.00 and 157.10.
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