USD/JPY gathers traction above 111.00, session tops

The greenback is trading on a better mood vs. the Japanese safe haven on Thursday, lifting USD/JPY to fresh daily peaks in the 111.30 area.

USD/JPY supported near 110.80

Spot dropped to the 110.80 area early in the Asian session in response to the markets’ dovish perception of the message from the Committee at the FOMC meeting on Wednesday.

It is worth mentioning that the Federal Reserve kept unchanged its Fed Funds target range at 1.00%-1.25%, also signaling that the balance sheet reduction should start ‘relatively soon’. Regarding inflation, the statement sees consumer prices now running below the 2% target, although it sees inflation stabilizing around the 2% over the medium term.

The current recovery in the pair appears propped up by today’s bounce off sub-2.28% levels in yields of the key US 10-year benchmark, which is hovering over the 2.29% area as of writing.

On the data front, US initial claims is next on tap seconded by June’s durable goods orders and trade balance figures. In Japan, critical inflation figures are due tomorrow along with household spending.

USD/JPY levels to consider

As of writing the pair is gaining 0.10% at 111.28 and faces the initial hurdle at 111.61 (100-day sma) seconded by 111.77 (10-day sma) and finally 112.12 (200-day sma). On the other hand, a break below 110.79 (low Jul.27) would aim for 110.60 (low Jul.24) and then 110.16 (76.4% Fibo of 108.81-114.51).