It is hard to say why the JPY swung around so much after the FOMC, especially since US yields were still lower last week, but it may be indicative of a shift in tone for the USD; the USD may have become oversold, and the rebound in USD/JPY may be leading a correction higher, according to the analysts at Amplifying Global FX Capital.
“On Friday 16 June, the Bank of Japan maintained its ultra-easy monetary policy. This was as expected, although, after a week of more hawkish central bank actions (Bank of Canada, Bank of England, Fed), the market may have been looking for some shift by the BoJ, such as de-emphasizing the size of asset purchases further in deference to yield curve control. The JPY switched from being quite strong, pressing levels near 109 after the US CPI report to falling more rapidly than other currencies after the FOMC statement, rising above 111.”
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