The dollar-yen pair was trading in the upper 163 yen range in late afternoon, unchanged from the close of the New York market the previous day. With the Bank of Japan and Federal Reserve policy meetings looming, market participants were reluctant to take positions, keeping the pair in a tight range of less than 20 sen. While the prevailing view is that the Federal Open Market Committee will hold rates steady, with the odds of a 25-basis-point hike priced in at just over 37 percent, some see the meeting as a live one. Tsuyoshi Ueno, chief economist at Nissay Research Institute, noted that even if the Fed stands pat, a pushback in rate hike expectations could weigh on the dollar, and that depending on the BOJ meeting and reports of a consumption tax cut on food, such pressure could easily be absorbed by yen selling.
The article discusses the dollar-yen pair stuck in a range ahead of BOJ and Fed meetings, with potential for dollar weakness if Fed stands pat and rate hike expectations push back, and yen selling could absorb pressure from BOJ meeting and consumption tax cut reports.