EL7.AI
Forex•17 June 2026•
2 min read

USD/JPY Holds Near 160 Level Ahead of Crucial FOMC Policy Decision

Key Facts

1USD/JPY consolidated around the 160.00 level as traders shifted focus toward the FOMC policy decision.
2The Bank of Japan hiked its policy rate to 1.00% as expected and announced a pause in bond tapering.
3Markets expect the Fed to keep rates unchanged while potentially revising inflation projections higher.

USD/JPY consolidated around the 160.00 level as traders shifted focus toward the Federal Open Market Committee (FOMC) meeting to determine future monetary policy directions. This consolidation follows the Bank of Japan (BoJ) hiking its policy rate to 1.00% as expected, alongside an announcement to pause bond tapering. According to reports, markets expect the U.S. Federal Reserve to keep interest rates unchanged while potentially revising inflation projections higher, which could bolster the dollar's strength.

This anticipation comes amid persistent inflationary pressures in the U.S., where annual Consumer Price Index (CPI) data released on June 10, 2026, showed inflation holding at 4.2%, up from the previous 3.8% per market data. Conversely, the BoJ is attempting to balance monetary tightening to support the yen with bond market stability, especially as other major central banks, such as the Bank of Canada, opted to hold rates at 2.25% on June 10, 2026, highlighting a divergence in global monetary trends.

Looking ahead, traders are closely monitoring psychological resistance at the 160.00 level, as any hawkish signals from the Fed regarding a 'higher for longer' stance could push the pair to test new highs. Key catalysts to watch include the U.S. Initial Jobless Claims scheduled for June 11, 2026, followed by UK GDP data on June 12, both of which are expected to drive volatility across major currency pairs.