Why buying Yen against Dollar is relatively attractive deal ahead of FOMC meet

With Bank of Japan's (BOJ) monetary policy out of the way, Yen has found bids heading into FOMC. Yen is the best performing major for second consecutive day and this week's best performing major so far.

With no further clues from BOJ over further easing and considerable uncertainty surrounding this week's FOMC meeting, investors have been flocking to the safety and liquidity of the Yen.

Why Yen is a better bet heading into FOMC?

• With Neutral Monetary policy from BOJ, Yen's movement is likely to be influenced by two key factors both ahead and post FOMC.
  
• While in one hand, movement of Dollar is likely to influence the move in Yen, risk aversion is likely to be major factor influencing Yen.

Now, if FED choose not to hike rates this week by 25 basis points Yen is likely to gain as Dollar is likely to face broad-based selloffs.

On the other hand, if FED do hike rates, it might generate considerable risk aversion in the market, again leading to Yen's rise.

Yen is currently trading at 119.7 against Dollar. Key resistance at 122 area and support at 118 and 116.