• USD/JPY advances toward 151.00 as uncertainty over BoJ’s plans of exiting the dovish monetary stance deepens.
• The Fed is widely anticipated to keep interest rates unchanged in March and May policy meetings.
• Investors await the US core PCE inflation and Japan’s inflation data.

The USD/JPY pair marches toward the crucial resistance of 151.00 in the early New York session. The asset holds strength amid uncertainty ahead of a data-packed weak.

Considering slightly bullish overnight futures, the S&P500 is expected to open on a positive note. The US Dollar Index (DXY) falls to near 103.70 on hopes that the Federal Reserve (Fed) will pivot to reducing interest rates sometime this year. 10-year US Treasury yields have dropped to 4.25%.

This week, investors will focus on the United States core Personal Consumption Expenditure price index (PCE) data for January, which will be published on Thursday. The economic data will guide market expectations of rate cuts by the Fed.

As per the CME FedWatch tool, investors see the Fed keeping interest rates unchanged in the range of 5.25%-5.50% in the March and May policy meetings. The market participants expect that the Fed will reduce interest rates by 25 basis points (bps) in June.

Meanwhile, Fed policymakers continue to reiterate the need to keep interest rates unchanged until they get evidence that inflation will come down to the 2% target.

On the Japanese Yen front, investors await the National Consumer Price Index (CPI) data for January, which will be published on Tuesday. The market participants are anticipating that price pressures may dip below 2%. This would derail hopes of the Bank of Japan (BoJ) exiting the expansionary monetary policy stance.