• USD/JPY sees a quiet week so far, little market movement with quiet trading.
• FOMC meeting later this week could change all of that if rhetoric/rate behaviour comes out of left field.

The USD/JPY pair is catching some slight lift in the Tokyo session, trading up into 109.40 near yesterday's highs.

Japanese markets were closed for Monday for a long weekend, and liquidity has been slow to wake up to the week. The USD/JPY has been hanging around the current levels for several trading days following a massive run up the charts for the Greenback, and buy side pressure remains high behind the Dollar. Climbing US Treasury yields bolstered the USD across the broader market, but the Greenback is remaining elevated even as the 10-year Treasury yield has sunk back below the critical 3% level.

Japan's Nikkei Manufacturing PMI came in better than expected, printing a 53.8 versus the forecast 53.3, but eyes are already turning to the US session with the FOMC's policy statement dropping on Thursday. The US Fed isn't expected to raise rates this week, but traders will be keeping a close eye on the statement and underlying figures as market participants try to position themselves as they figure out if the FOMC is headed for two more rate hikes this year, or three.

USDJPY: The daily and weekly momentum indicators look positive for further gains

USD/JPY Levels to watch

Valeria Bednarik, chief analyst at FXStreet, explained that the 4 hours chart for the pair shows that, while it holds well above its moving averages,  "technical indicators have turned lower, the Momentum around its mid-line, and the RSI currently at 54, pulling back from near overbought readings," adding,  "nevertheless, the downside potential remains limited, as the pair would need to break the 108.00 figure to be in shape for further declines."