The U.S. dollar is really starting to flex its muscles against the Japanese yen over the last couple of days. That being said, it’s worth noting that we’re at the bottom of a consolidation area, with the ¥156.50 level being a bit of a floor. I still like the idea of buying short-term dips here, especially if the Federal Reserve on Wednesday ends up being relatively tight with its statement—hawkish, I should say.

The market continues to be one that waits for central banks, and of course, the Bank of Japan has an interest rate decision and statement on Friday. So, there’s that as well. Ultimately, though, I do think the Japanese are likely to do nothing. The Americans are probably going to sound a little bit more hawkish, so I do favor the upside. Traders get paid to hang on to this pair.