USDJPY slid to 1-month low at 110.76. And it happened even though recent comments of the BOJ officials made it clear they would do their utmost to reach the inflation target of 2%.
It means there is no talk of stimulus removal, and it should be bad for yen.
The pair fell last week only due to USD weakness, driven mostly by political conflicts and economic disappointments.
The FOMC rate decision is scheduled for release this week. Yes, the market is really disappointed by the series of weak reports that raise some doubts about the chances of another rate hike before the year's end. However, the FOMC may confirm the Fed commitment to announce another rate hike on December meeting, and that would be enough to trigger the reversal in USD/JPY given its oversold nature, and the contrast of the BOJ position.
A wave of short covering may only speed up the possible rise of the pair. The nearest target for USDJPY may become 111.70 and 112.40 to follow.