Meanwhile, the Japanese Yen gains came as investors prepare for the latest monetary policy decisions from Japan and the United States this week. The Bank of Japan is expected to keep interest rates unchanged on Friday, but it is likely to indicate more rate hikes. Financial markets are betting that the Bank of Japan will raise interest rates again in December, while the move in October remains uncertain. Elsewhere, the US Federal Reserve is widely expected to deliver its first interest rate cut in four years on Wednesday, with financial markets pricing in a two-thirds chance of a large 50 basis point cut. Elsewhere, Japanese Finance Minister Shunichi Suzuki said on Tuesday that forex volatility has both advantages and disadvantages for the economy, stressing that rapid moves are undesirable. 

Furthermore, Japan’s 10-year bond yield hits one-month low. The yield on the benchmark 10-year Japanese government bond fell to around 0.83%, hitting a one-month low and tracking a decline in US bond yields amid growing expectations that the Federal Reserve will cut US interest rates more aggressively this week. Financial markets are currently pricing in a 67% chance of a 50-basis point cut, up from just 25% a month ago, according to CME’s FedWatch tool. 

On the other hand, the Bank of Japan is widely expected to keep its policy steady this week but is likely to signal further rate hikes. Markets are betting that the BoJ will raise interest rates again in December, while a move in October remains elusive. Fitch recently revised its interest rate forecasts for Japan, now expecting them to be 0.5% by the end of 2024, 0.75% in 2025 and 1% by the end of 2026. 

USD/JPY Technical analysis and Expectations Today: 

Despite recent rebound attempts, the overall trend for the USD/JPY exchange rate remains bearish, and the psychological support level of 140.00 will remain a testament to the bears' strong control of the trend. At the same time, technical indicators will move towards oversold levels. Technically, the reaction to the announcements of the world's central banks this week will determine the fate of the dollar/yen. Moreover, it will decline further and break important support levels, with the nearest support at 138.00 for further strengthening of the bears' control. Conversely, according to the daily chart, the psychological resistance of 150.00 will remain the most important for a real reversal of the overall trend to bullish. 

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