FXStreet (Mumbai) – The US dollar halted its weak recovery versus the Japanese currency at Tokyo open, with USD/JPY consolidating around 123.50 levels. The major ran through fresh offers around the mid-point of 123 handle as traders from Asia digest the latest FOMC decision and Fed Chair Yellen’s comments, keeping USD bulls at bay.
USD/JPY pressured by USD softness
Currently, the USD/JPY pair trades modestly flat at 123.53, clinging to the 123 handle. The USD/JPY defends mild gains and stalled its minor rebound near 123.50 levels as the Asian traders continue to favour the yen after the FOMC statement was widely read as more dovish with a Fed’s extended data-dependent mode weighing on the US dollar. The US dollar index, measuring the relative strength of the greenback against a basket of six major currencies trades -0.16% lower at 94.33.
Fed Chair Yellen noted, “Economic conditions do not yet warrant an increase in the federal funds rate,” “My colleagues and I would like to see more decisive evidence that a moderate pace of economic growth will be sustained.”
Moreover, with no progress reached on Greece so far, the yen remains broadly supported on the back of increased bids for safe-haven assets such as gold, treasuries, yen etc.
Meanwhile, traders now shift their attention towards a host of key US data flow including, US CPI, weekly jobless claims, current account and Philly Fed Manufacturing gauge, which may provide fresh cues on the US dollar moves.
USD/JPY Technical Levels
To the upside, the next resistance is located at 123.53 (10-DMA) levels and above which it could extend gains 124 (20-DMA) levels. To the downside immediate support might be located at 123.22 (June 17 Low) below that at 122.60 (June 11 Low) levels.
(Market News Provided by FXstreet)