USD/JPY tests support as BoJ rate decision looms, volatility expected

USD/JPY hovers near critical support levels as traders position ahead of the Bank of Japan's upcoming rate decision, with expectations mounting for potential policy hold that could spark significant volatility. The pair remains under pressure as market participants weigh the implications of Japan's monetary policy stance against ongoing US dollar dynamics. Technical analysis indicates the pair is testing major support zones that have held throughout recent trading sessions. A BoJ decision to maintain current rates could trigger sharp yen movements as traders reassess carry trade positions. The setup suggests heightened volatility potential, with key support levels acting as crucial decision points for directional moves. Traders should prepare for increased market activity around the BoJ announcement, with potential for rapid price swings in either direction. Risk management becomes critical as USD/JPY approaches this significant monetary policy event.