USD/JPY is mixed on a hawkish hold FOMC outcome, faded from fresh sesison highs
- Fed leaves rates unchanged.
- Fed expects inflation to move up this year.
- USD/JPY makes fresh highs
USD/JPY has been mixed on the outcome of the FOMC but bulls maintain the 109 handle and have scored a fresh high for the session.Currently, USD/JPY is trading at 109.39, up 0.51% on the day, having posted a daily high at 109.46 and low at 108.60.
Fed expects higher inflation
As expected, the FOMC left rate son hold. The Fed introduced only minor changes to the statement and mentioned that the economy warrants further gradual increases in rates. The statement leaves risk open for a March hike while the central bank expects inflation to move higher this year and to stabilize around the 2% objective over the medium term.
Fed leaves interest rates unchanged at Jan meeting, Yellen's last
“The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate,” the statement reads.
USD/JPY: sentiment and flows remain dominant as JPY - Scotiabank
Meanwhile, domestically for the yen, analysts at Scotiabank explained that domestic industrial production figures were stronger than expected and comments from BoJ Gov. "Kuroda and Dep. Gov. Iwata have reinforced a determination to ‘persistently continue easing’ in order to reach the 2% inflation target."
USD/JPY levels
The first resistance lies at the 109.97 ahead of the 110.19 as the mid-January low and the accelerated downtrend ahead of as the 111.75 200-day moving average. To the downside, the September lows are located at 108.27/107.32 where the 107.70 2012-2018 uptrends is located.