Credit: REUTERS/DADO RUVICSept 20 (Reuters) - USD/JPY rose on Tuesday on news that Russian-controlled regions in Ukraine planned to hold referendums on joining Russia, adding safe-haven flows to the dollar's case for returning to this month's 24-year high of 144.99.
Traders are also wary before the conclusion on Wednesday of the Fed's two-day meeting, which is expected to deliver a 75bp hike, exacerbating the rates divergence pulling USD/JPY higher and testing Japanese resolve to limit yen weakness.
The BoJ is expected to remain accommodative even after data showing Japanese inflation rose to 3% in August, though core-core held below the BoJ's 2% inflation target at 1.6%.
Tuesday's rise above 143.80 hints that USD/JPY bulls may be gearing up for a test of 24-year highs at 144.99.
A break above there would put the August 1998 high at 147.63 in focus and open the way for a test of key psychological resistance at 150, and likely start a new round of BoJ intervention talk.
For more click on FXBUZ
JPY Chart: https://tmsnrt.rs/3qTRDZS
(Paul Spirgel is a Reuters market analyst. The views expressed are his own.)
((paul.spirgel@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
