USD/JPY moves little post-US CPI, focus remains on FOMC

The USD/JPY pair remained confined well within its daily trading range, above mid-108.00s and had a rather muted reaction to the latest US inflation figures.

Having failed to capitalize on its early uptick to weekly tops, the pair seesawed between tepid gains/minor losses and failed to gain any meaningful traction through the early North-American session on Wednesday.

Traders remain on the sidelines ahead oF FOMC

Bulls seemed rather unimpressed by a modest pickup in the US dollar demand and hotter-than-expected US Consumer Price Index, which edged higher by 0.3% MoM in November as compared to a 0.2% rise expected.

Adding to this, the yearly rate also bettered consensus estimates pointing to an uptick to 2.0% and rose by 2.1% during the reported month from 1.8% recorded in the previous month, while core CPI matched expectations.

Meanwhile, the pair moved little as investors refrained from placing any aggressive bets and preferred to stay on the sidelines ahead of the key event risk – the highly anticipated FOMC monetary policy update.

The US central bank is universally expected to leave interest rates unchanged and hence, the key focus will be on updated economic projection, which along with the post-meeting press conference might influence the pair.

Technical levels to watch