The US dollar strengthened slightly against the Japanese yen in Asian trading on Monday, approaching the 154.00 level again and partially recovering its losses from last Friday. However, in terms of overall trend, the USD/JPY pair remains within the trading range formed over the past week or so, and is not far from the nearly seven-month low reached last Tuesday, indicating that the market remains cautious ahead of key central bank meetings. This week will be a crucial policy window for USD/JPY. The Federal Reserve will hold its policy meeting on September 15-16, while the Bank of Japan will announce its interest rate decision on September 17-18. Changes in the policy direction of these two central banks will directly affect the USD/JPY interest rate differential and may become a core factor determining the next stage trend of USD/JPY. In the US, recent inflation data continues to strengthen market expectations for a Fed rate hike this week. The US core CPI rose 0.3% month-on-month in August, higher than the previous value of 0.2%, indicating that underlying price pressures remain somewhat resilient. Against this backdrop, the market has significantly increased its pricing in a Fed rate hike. If the Fed ultimately raises rates and releases a hawkish signal, US yields and the dollar may receive further support, thus providing short-term upward momentum for USD/JPY. Meanwhile, the situation in the Middle East continues to provide safe-haven demand for the dollar. Recent escalation of regional tensions, shipping risks related to the Strait of Hormuz, and delays in regional diplomatic arrangements have affected market risk appetite. As global investors reduce their risk exposure, the safe-haven attributes of the dollar may be strengthened, which is also one of the important factors contributing to the recent rebound of USD/JPY from its lows. However, the upside for USD/JPY remains significantly limited by expectations of yen policy. The market has largely priced in the Bank of Japan's (BOJ) 25 basis point rate hike this week and continues to bet on a possible further tightening of policy later this year. Recent statements from BOJ officials regarding potential inflation approaching 2% and the policy rate remaining below neutral have further strengthened market expectations of a normalization of Japanese monetary policy. If the BOJ not only raises rates this week but also signals further rate increases, Japanese government bond yields could rise further, and a narrowing of the USD/JPY interest rate differential would drive funds back into yen assets, thus limiting the USD/JPY rebound. Conversely, if the BOJ remains cautious about further rate hikes, while the Federal Reserve continues to emphasize US inflation risks, the short-term USD/JPY interest rate differential may tilt back towards the dollar, giving the exchange rate a chance to test upper resistance levels. The main market contradiction thus centers on two policy paths: whether the Federal Reserve will maintain a hawkish stance after this week's rate hike, and whether the BOJ will confirm a continued rate hike cycle through its policy statement and the governor's speech. Given the close timing of the two central bank meetings, the volatility of USD/JPY this week is likely to increase significantly. From a market sentiment perspective, while there is some buying interest around 154.00, the bulls have not yet established a trend breakout. Investors tend to reduce directional bets ahead of central bank meetings, so the exchange rate is likely to remain range-bound. If the dollar receives support from both US interest rate expectations and safe-haven flows, the rebound above the 154 level may continue; however, if the Bank of Japan further strengthens its hawkish stance, yen buying will regain dominance, and USD/JPY may retest recent lows. From a daily chart perspective, USD/JPY remains bearish in the short term. After breaking below the 155.20-155.30 area, the price has not yet regained footing above this important level, which has now transformed from support into key resistance. As long as the exchange rate continues to trade below 155.20-155.30, the overall downward structure remains unchanged. The first support level to watch is the 50% Fibonacci retracement level around 152.00. If this level is breached, the next target is the 61.8% retracement level around 149.17. If the daily chart continues to break below 149.17, the next target could be the 78.6% retracement level around 145.14. On the upside, a retest of 155.30 could alleviate the current short-term bearish pressure and drive a further rebound. Looking at the 4-hour chart, USD/JPY is currently in a rebound phase after low-level consolidation, with the 154.00 area being a key battleground for bulls and bears. A decisive break above 154.50 and a further recovery of the 155.20-155.30 area would indicate significantly strengthened rebound momentum, potentially leading to a move towards higher resistance levels. Conversely, if the rebound is capped in the 154.50-155.20 area and breaks below 153.50 again, the market may retest the 152.00 support level. With the Federal Reserve and the Bank of Japan announcing their policy decisions this week, there is a possibility of a rapid breakout or a reversal to trigger stop-loss orders in the technical charts. Short-term traders should focus on the effective breakout of key support and resistance levels. Editor's Summary: The USD/JPY pair is currently at a crucial juncture where policy expectations from the Federal Reserve and the Bank of Japan are intertwined. Resilient US inflation and safe-haven demand are supporting the dollar, but rising expectations of a Bank of Japan rate hike continue to support the yen, limiting the upside potential of the exchange rate. In the short term, key focus is on whether the 155.20-155.30 area can be reclaimed, and whether the 152.00 support level can hold. If the Fed is hawkish while the Bank of Japan's policy guidance is dovish, USD/JPY may have a chance to rebound; if the Bank of Japan further strengthens its rate hike path, the exchange rate may seek support again at 149.17 or even lower.