USD/JPY thumped lower 20 pips in Tokyo's first hour of trade

USD/JPY has taken a 20 pip thump in Tokyo but has since moved into a sideways drift, with demand coming in at S1 and the dollar stabilising - (It was a potentially large order being executed ahead of the FOMC later this week?):

Fed outlook:

"This week’s Fed meeting will see interest rates left unchanged and the central bank sticking to its “patient” approach to policymaking. However, look out for announcements regarding the balance sheet with “quantitative tightening” seemingly coming to end, analysts at ING Bank explained. 

Looking to the Futures markets, it continues to price out the possibility of any further Fed rate hikes in this cycle, but there is an increasing chance now up to  30% of a cut by December.

As for the US session, Wall Street was creeping higher to fresh highs ina four-session winning streak of the Dow:

• The Dow Jones Industrial Average added 65 points, or less than 0.3%, to finish near 25,912, based on preliminary numbers.
• The Nasdaq Composite climbed 0.3% to end around 7,714. 
• The S&P 500 rose less than 0.4% to end near 2,833.

USD/JPY fell from 111.60 to 111.30 during the course of the day while the US 10yr treasury yield ranged sideways between 2.58% and 2.61%.

USD/JPY levels

Valeria Bednarik, Chief Analyst at FXStreet explained, that on a daily basis, the pair has set a lower low and a lower high, a sign of mounting downward pressure, although it still stuck to its 100 and 200 DMA, both directionless and converging in a tight 10 pips' range:

"The bearish case continues building up according to technical readings in the 4 hours chart, as the pair is barely holding above a bullish 100 SMA, while technical indicators entered bearish ground, the Momentum heading sharply lower and the RSI flat at around 47."