Improved risk sentiment and paused US-Iran tensions weigh on the USD, with markets eyeing Fed and BoJ policy meetings this week.
USD/JPY fell 0.09% to around 163.70 on Monday as the US Dollar weakened amid easing geopolitical tensions. Washington and Tehran confirmed a pause in attacks, boosting risk appetite and lifting US equities.
The US Dollar Index (DXY) remained in negative territory, while investors awaited this week’s Federal Reserve and Bank of Japan decisions. Both central banks are expected to hold rates steady, with focus shifting to policymakers’ tone. A Reuters poll showed most economists expect the BoJ to hike rates by year-end.
Durable Goods Orders data provided limited support for the USD, as markets brace for potential shifts in monetary policy guidance from the Fed and BoJ.