USD/JPY Edges lower for second day as traders brace for Fed and BoJ

Japanese Yen steadies near 158.90 as a central bank double-header looms large this week.

The Fed is widely expected to hold rates at 3.75% at Wednesday's meeting, with traders focused on updated dot plot projections.

The BoJ is forecast to hold at 0.75% on Thursday; elevated energy prices tied to the Strait of Hormuz disruption are expected to feature in the central bank's economic assessment.

USD/JPY fell less than 0.1% on Tuesday, settling close to 158.90 in a narrow, directionless session. It was the second consecutive day of losses from last week's year-to-date high around 159.75, with a small-bodied candle reflecting the market's reluctance to push through the 160.00 level ahead of back-to-back central bank decisions.

The Federal Reserve (Fed) is all but certain to hold its policy rate at 3.75% on Wednesday, with markets pricing near-zero odds of a move. Attention will fall on the updated Summary of Economic Projections (SEP) and Chair Jerome Powell's press conference, where any shift in the median 2026 cut projection could jolt the US Dollar. With just 22 basis points of cuts now priced across the full year, even a marginally dovish tilt in the dot plot would carry significant weight.$USDT #usdjpy