There is low activity in the financial markets, and stock indexes as well as bond yields change slightly before the FOMC meeting. At the same time, stock indexes almost do not react to positive company reports, with nearly all companies reporting higher-than-forecast profits in the first quarter.

The Fed's regional offices continue to report high levels of industrial activity. The Richmond Fed reported stability in the composite index at 17p, indicating continued growth as all three components of the index – shipments, new orders and employment remained positive. Now, attention is drawn to the high rate of price growth, including expected prices, which indicates growing inflationary pressure.

The FOMC meeting is considered to be a passing one, but comments on the beginning of discussion of the timing of the curtailment of the QE program are likely, which may turn out to be a strong driver at the moment. So while there is no information, the markets will remain stable.

USD/CAD

Bank of Canada Governor Macklem said he is still targeting the 2% target, despite the fact that it is expected to temporarily exceed this level. In his speech to parliament, he focused precisely on targeting inflation and possible risks of both a downward and upward trend. Since Macklem did not add anything significant to the Bank of Canada's position made last week, the market did not give any special reaction to the speech.

The target price turned down again after a four-week correction. The reversal is based on the build-up of a long CAD position in the futures market, reflecting the mood of speculators who are waiting for a more aggressive exit from the super soft policy than in the US.

Today, retail sales data for February will be published. On Friday, a preliminary estimate for GDP for February will be released, with positive expectations. The Canadian dollar has a fairly solid position to further strengthen.

The expected bullish reversal did not happen. It can be assumed that an attempt will be made in the near future to update the low of 1.2363, and then the support at 1.2246. The next target is 1.2050/70, where the middle of the long-term descending channel passes.

USD/JPY

The Bank of Japan left all the main parameters unchanged after completing the regular meeting on monetary policy, which is not surprising. According to a number of complex indicators, BoJ has no reason to change anything towards tightening, but additional measures aimed at supporting the economy are not ruled out.

On April 27, the BoJ revised its forecasts for economic activity. The real GDP forecasts for the coming years are slightly raised, while inflation is still as gloomy as it was 10 and 20 years ago. For 2023, prices are expected to rise by only 1%, which is extremely far from the Bank of Japan's 2% target, and risks are still biased towards the downside. All this means that the ultra-soft policy is being delayed indefinitely.

The T/S ratio (the ratio of the TOPIX index to the S&P 500) continues to fall as Japan lags behind in vaccinations and ETF purchases by the Bank of Japan. If US stock indexes break records, the flow of investors in Japanese stocks will weaken.

Accordingly, net asset purchases by non-residents, which reached 25 trillion yen in 2015, declined to zero in 2021, and sometimes went into negative zone. On this side, the demand for the Japanese yen is weaker than the historical average.

The target price slowed down its growth, primarily because UST yields rebounded from their March highs. On the CFTC, the yen's net short position has stopped rising, but the accumulated volume of short contracts is still huge.

In conclusion, the Japanese yen continues to be under strong pressure in the long term, and a movement to the level of 1.26 is more likely than a return to 99. As for the short term, the US dollar is weak, resulting in a slight correction. However, a serious upward movement is possible today if political events in the US, including the result of the Fed meeting, turn out to be hawkish, as the market expects.