The US dollar continues to fall against the Japanese yen, as the market focuses on US-Japan policy differences and FOMC resolutions

Huitong Financial APP News--In Asian trading on Wednesday, the USD/JPY rebounded slightly, but it was still below the 147.00 integer mark. The overall performance of the yen was cautious. Against the backdrop of obvious differences in the policy paths of the United States and Japan, the pressure on the yen is limited.
The market generally believes that the Bank of Japan will adhere to the easing policy, while the Federal Reserve is expected to cut interest rates by 25 basis points on the same day to narrow the US-Japan spread, thus providing certain support for the low-yielding yen.
In Japan, August trade data showed that the trade deficit widened from 118.4 billion yen to 242.5 billion yen, but it was still lower than market expectations of 513.6 billion yen. Exports fell by only 0.1%, better than the expected 1.9% decline.
Imports fell by 5.2%, indicating that domestic demand remains weak. The resignation of Japanese Prime Minister Shigeru Ishiba has increased policy uncertainty and provided reasons for BoJ to raise interest rates cautiously. BoJ is generally expected to maintain its benchmark interest rate at 0.5%, but may gradually increase rates before the end of the year.
In the United States, the Federal Reserve is expected to resume the interest rate cut cycle, and this interest-rate meeting may cut interest rates by 25 basis points. Market expectations for the remaining two interest rate cuts this year are heating up, which is also the main reason why the US dollar has fallen recently and the USD/JPY has fallen to the support zone of 146.20.
Geopolitical risks also affect market sentiment: Russia launched a large-scale attack on the southern city of Zaporozhye in Ukraine, and U.S. President Trump urged Ukraine President Zelensky to reach an agreement as soon as possible and Europe to immediately stop purchasing Russian oil.
At the same time, Israel's ground offensive against Gaza City and tensions in the Middle East support the demand for the yen as a safe-haven asset.
Looking at the daily chart, the key support levels are 146.20 (100-day SMA) and 146.00, and breaks below may further drop to 145.35 and the psychological level of 145.00. The upper resistance level is 146.70 short-term resistance, and the 147.00 integer level is an important psychological level; after breaking through 147.15-147.20, it may look up to 147.55 or even 148.00.
If it continues to break through 148.00, it can challenge the 200-day moving average (about 148.75) and the high of 149.00. If the intra-month high of 149.15 breaks through, it will be biased towards bulls in the short term. The daily oscillator was once again short, indicating that downward pressure is still there, but the rebound from 146.20 support requires careful observation and follow-up.
Overall, the USD/JPY short-term is still mainly volatile and weak. We need to pay attention to the FOMC and BoJ policy signals, as well as the effectiveness of technical support.
The short-term yen is limited by two major factors: BoJ keeps interest rates unchanged, coupled with weak domestic demand and political uncertainty, which limits the yen's sharp downward trend; the Federal Reserve's expectation of interest rate cuts supports the dollar's rebound, but the upward momentum of the USD/JPY is limited, mainly limited by 146.20 support.
Pay close attention to the US-Japan policy meetings and the immediate impact of geopolitical risks on the market.