USD/JPY Holding Above 148.00 As BoJ Comes Into View

USD/JPY was range bound through Monday's session. Dips to 147.60/65 were supported, with the pair gravitating back above 148.00 by late NY trade. We currently track in the 148.10/15 region, little changed for Monday's session.

• The Bank of Japan rate decision takes focus today. While consensus looks for no change in policy, any guidance or suggestion toward potential tightening in April will be carefully watched by markets. JPY vols suitably bid ahead of the decision, with overnight implied marked higher to 17 points, implying a ~105 pip swing - around double the swing implied average background vol this year.
• Broader market expectations look fairly contained, with 1 week USD/JPY risk reversals comfortably above trough points seen prior to some 2023 BoJ meetings. See our full BoJ preview here .
• Elsewhere, focus will remain on broader US yield momentum. US-JP 10yr yield differentials have eased off recent highs, but Fed rate cut expectations for the first half of the year have been pared further, still providing some support for USD dips.