FXStreet (Mumbai) - USD/JPY is seen posting moderate losses at Tokyo-open and hovers around 123.50 levels, as the greenback extends correction from seven-month peaks against its major competitors. The major, however, manages to trade well above post-FOMC minutes low reached at 123.38, as the divergent monetary policy outlooks between both the Fed and BOJ continue to favour the upside in USD/JPY. Although the FOMC minutes offered no new surprises overnight, the document did reveal that the Fed remains on track to raise interest rate next month, while such a move is expected to be data-dependent. On the other side, the BOJ ends its two-day monetary policy meeting today, with the decision expected to be out by 0300-0.430GMT. While the central bank head Kuroda will speak at the press conference at 0630GMT. BOJ expected to stand pat, in a wait-and-see mode It’s widely expected that the Bank of Japan (BOJ) will leave its monetary policy settings unchanged at today’s policy announcement; maintaining its pledge to increase the asset purchase program at an annual pace of 80 trillion yen. At the press conference, Governor Kuroda is likely to reiterate the same statements echoed at the last meeting. He is expected to repeat that the QQE is having its intended effects as the economy recovers at moderate pace. While the price trend is seen improving over the longer-term. Markets believe that the next round of easing may be very well seen in Jan next year, as the BOJ has the practice of altering its policy settings when the bi-annual outlook is published. Also, the central bank may sit tight and wait to see the Fed’s take on the rates in Dec, before rolling out further stimulus. Moreover, with the recent strength in the USD/JPY on increased Dec Fed rate hike talks, the BOJ has one more reason to hold-off on easing today. The Japanese central bank is already concerned over falling investment demand from the corporates and lower wage-price growth. Therefore, additional stimulus would further accentuate the pain as it will weaken the yen even further, hiking import costs. Earlier this week, the Japanese economy entered a technical recession, with the Q3 prelim GDP numbers, dipping by 0.8% on an annualised basis, against expectations of -0.2%. However, the BOJ is expected to shrug off the weak growth numbers as it sees the recession as temporary. Recall that just two week back, on Oct 30, the central bank kept the policy steady while downwardly revising its growth and inflation forecasts. The BOJ also pushed back the timeline for reaching its 2% price target to second half 2016. USD/JPY key levels to monitor Valeria Bednarik, Chief Analyst at FXStreet explained, “Technically, the upside prevails in the short term, as in the 1 hour chart, the price is holding well above its 100 and 200 SMAs, both aiming higher around 123.00, while the technical indicators present bullish slopes in positive territory.” “In the 4 hours chart, the price is also far above its moving averages, but the technical indicators are beginning to look exhausted near overbought territory, supporting a downward corrective movement ahead, particularly on a break below 123.20, the immediate support.” For more information, read our latest forex news.