USD/JPY: Stationary around 110.65 in Tokyo ahead of FOMC minutes
|- USD/JPY has moved into a consolidation of the peak following dovish Kuroda in Asia where the dollar slipped dup in European and North American trade.
- USD/JPY is trading at 110.65, arounf the 110.69 high and handful of pips above the 110.51 low.
USD/JPY jumped from 110.50 in Tokyo trade yesterday due the dovish comments from BoJ governor Kuroda and went onto110.82 in London but then faded a little as US yields fell.
As analysts at Westpac pointed out, Fed hawk Mester supported the Fed’s wait-and-see approach, adding that if her economic outlooks were realized the funds rate would need to rise slightly further.
"But influential NY Fed president Williams told Reuters that in order to support further rate hikes, he would need a different outlook for inflation and growth than his current view. The US 10yr treasury yield fell from 2.67% to 2.64%, while the 2yr yield fell from 2.52% to 2.49%. Futures markets continued to price little chance of any further Fed rate hikes in this cycle," the analysts explained.
Looking ahead, we have the minutes from last FOMC meeting from 29-30 Januar. However, the analysts at Westpac explained that these are somewhat dated:
"Still, there is often enough in the details to move markets, if there is a particular theme that jumps out. One to watch is whether many FOMC members sounded inclined to remove further rate rises from their 2019 outlook, as SF Fed president Daly suggested last week."
USD/JPY levels
Valeria Bednarik, Chief Analyst at FXStreet explained that the 4 hours chart shows that technical indicators returned to neutral levels:
"In the same chart, the 100 SMA maintains a modest bullish slope, acting as dynamic support at around 109.95, providing a relevant intraday support that if it's broken, could result in a steady decline over the following sessions. The yearly high stands at 111.12, the level to break to trigger a bullish run."
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