USD/JPY Consolidates in Tight Range as Volatility Pressures Build

USD/JPY remains confined within a narrow trading range as market participants await clarity on monetary policy divergence between the Federal Reserve and Bank of Japan. The pair shows signs of consolidation with building volatility pressures, suggesting a potential breakout ahead of key risk events. Technical indicators point to compression between 147.50 support and 148.20 resistance, with decreasing trading volumes indicating market indecision. Options positioning reveals elevated implied volatility for the week, reflecting uncertainty around the Fed's rate decision and potential BoJ intervention risks. The yen's safe-haven status could reassert if global risk sentiment deteriorates or if the Fed delivers a more aggressive easing message. Traders should monitor the 147.00 level as a key support threshold, while a break above 148.50 could signal renewed dollar strength. Near-term direction likely depends on relative central bank policy shifts.