FxWirePro: USD/JPY holds marginal gains ahead of FOMC policy meet

Chart - Courtesy Trading View 

USD/JPY was trading 0.06% higher on the day at 113.78 at around 10:30 GMT.

The major is extending marginal gains ahead of the key FOMC policy meet, is on an uptrend for the 3rd consecutive session.

Markets cautious ahead of the FOMC/BoJ policy meetings. The Fed will announce its decision later today, while the BoJ is scheduled on Friday.

Hawkish Fed expectations and an uptick in the US Treasury bond yields are likely to keep the US dollar supported.

That said, worries about the potential economic fallout from the spread of the Omicron variant keep a lid on any optimistic moves.

Bank of Japan Governor Haruhiko Kuroda remains optimistic on the inflation outlook. Says consumer inflation may approach his 2% target.

Kuroda said that the central bank would maintain its ultra-loose monetary policy to ensure any rise in prices would be accompanied by higher wages and a recovery in the economy.

The Bank of Japan (BOJ) injects cash into markets for the third day in a row. The Japanese central bank offered JPY2 trillion (circa $17.6bn) via bond buys.

Support levels - 113.56 (5-DMA), 113.17 (55-EMA)

Resistance levels - 113.80 (20-DMA), 114.02 (Tenkan Sen)

Summary: USD/JPY remains sidelined as investors remain in a wait-and-see mode ahead of the critical Fed and BoJ decisions. Price action is extending sideways grind above daily cloud support. Break below to see more weakness.