USD/JPY Coils in Tight Range Before BoJ Decision and US NFP

USD/JPY remains compressed in a narrow 152.50-153.20 range, with implied volatility dropping to three-month lows ahead of Thursday's Bank of Japan policy meeting and Friday's US employment data. The pair's 20-day average true range has contracted to just 95 pips, signaling an imminent breakout. Markets assign 25% probability to a BoJ rate hike this week, with speculation mounting over potential policy normalization. Technical indicators show converging moving averages and Bollinger Bands at their tightest since September, classic precursors to explosive moves. Key resistance sits at 153.50 (December high), while support holds at 152.00 (psychological level). A hawkish BoJ surprise could trigger a sharp decline toward 150.00, while disappointing US NFP data below 150K jobs would likely pressure the pair lower. Conversely, strong US data combined with a dovish BoJ could propel USD/JPY toward 155.00.