USD/JPY gives back early gains ahead of BoJ-Fed monetary policy decision

• USD/JPY gives up initial gains and turns flat around 144.15, while safe-haven assets lose steam.
• Both the BoJ and the Fed are expected to leave interest rates at their current levels.
• Fed officials have already indicated that monetary policy adjustments are inappropriate until they get clarity on the economic outlook under Trump's leadership.

The USD/JPY pair surrenders its early gains and flattens around 144.15 during European trading hours on Monday. The pair faces selling pressure as the US Dollar (USD) falls back after failing to extend Friday's recovery move.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, retreats to near 98.00.

Meanwhile, the demand of safe-have assets, such as the US Dollar and the Japanese Yen (JPY), has diminished despite tensions between Iran and Israel have escalated.

This week, the major triggers for the pair will be monetary policy announcements by the Bank of Japan (BoJ) on Tuesday and the Federal Reserve (Fed) on Wednesday, respectively.

The BoJ is expected to leave interest rates steady at 0.5% as officials have expressed growth concerns amid global uncertainty due to trade war risk stemming from the tariff policy imposed by United States (US) President Donald Trump.

Simultaneously, the Fed is also expected to hold borrowing rates steady in the current range of 4.25%-4.50% as officials have stated that they need clarity on the new economic policies announced by US President Trump before making any monetary policy adjustments.

Investors will closely monitor the Fed's dot plot, which shows where officials see interest rates heading in the medium and long term.