USD/JPY bounces off lows near 112.20

The greenback remains on the positive note vs. the Japanese safe haven on Thursday, with USD/JPY managing to rebound from daily low around the 112.20 area.

USD/JPY stronger on upbeat FOMC, USTs

The pair broke above the key barrier at the 112.00 handle on Wednesday as market participants perceived as hawkish the latest FOMC meeting.

It is worth mentioning that the Committee left unchanged the ‘dots plot’ from the June meeting, while Yellen reiterated that the recent sluggish inflation figures remain temporary. In addition, the Fed will start reducing its balance sheet in October.

On the BoJ side, the central bank left intact its monetary status quo earlier in the session, matching the broad consensus.

Supporting the up move in spot to fresh 2-month tops, yields of the key US 10-year reference climbed to the boundaries of the 2.29% handle, albeit receding some bps to the current 2.275% area at the time of writing.

In the US data space, weekly initial claims are due later in the session followed by the manufacturing gauge from the Philly Fed for the current month.

USD/JPY levels to consider

As of writing the pair is gaining 0.22% at 112.48 and a breakout of 112.72 (high Sep.21) would open the door to 112.82 (76.4% Fibo of 114.51-107.32) and finally 113.60 (high Jul.14). On the other hand, the immediate support emerges at 112.20 (200-day sma) seconded by 111.77 (61.8% Fibo of 114.51-107.32) and then 111.14 (100-day sma).