Research Team at Societe Generale, suggests that the USD/JPY remain essentially driven by the expectations surrounding monetary policy in the US and Japan. Key Quotes “The two central banks meet almost at the same time at end-April, and are unlikely to disrupt market pricing. Should the outcomes be less neutral, in any event, they should both lean on the dovish side. The net effect of the quasi simultaneity of the Fed and BoJ meetings (27 and 28 April) should essentially preserve the USD/JPY range, although a cluster of realised volatility is unlikely to be avoided in that period. Fed. The next two FOMC meetings are on 27 April and 15 June, with the former only six weeks after the March meeting. After having cut two hikes from the dot plot and revised the growth outlook downwards, the board is unlikely to alter its call. The June meeting clearly bears more uncertainty, and is therefore more likely to shake the USD/JPY consolidation only later on. BoJ. After having introduced negative rates at end-January, the bank of Japan is also unlikely to rock the boat on 28 April. Importantly, the FX market already has discounted that the central bank now has limited credibility to weaken the yen. It expressed its distrust through the USD/JPY break, which closely followed the January policy action. The BoJ is unlikely to either impress or disappoint the market.” For more information, read our latest forex news.