FundamentalOverview

The USD hasn’t done muchsince the FOMC decision as the market awaits something new to push into eitherdirection. The Fed delivered on expectations with no surprises whatsoever. Thecentral bank kept rates steady, reduced the QT pace, revised growth lower andinflation higher, and kept the dot plot mostly unchanged.

Fed Chair Powell acknowledgedthe current uncertainty around Trump’s policies and the inflation outlook but confirmedthat the economy remains healthy, and the Fed is in a good position to wait formore clarity.

The only noteworthy commentwas the dismissal of the rise in the long-term inflation expectations in theUniversity of Michigan Consumer Sentiment survey as he labelled it as anoutlier given that other metrics show long term expectations stable or even slightlylower.

On the JPY side, the BoJkept everything unchanged as expected with the statement acknowledging heighteneduncertainty surrounding Japan’s economy, adding a new reference to the"evolving situation regarding trade."

This suggests that policymakersare closely monitoring Trump’s tariff policies, with global trade developmentsremaining a key risk factor for Japan's outlook. The market continues to expect32 bps of tightening by year-end with particular focus on inflation data asrecently we started to see some easing.

USDJPYTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDJPY eventually managed to pull back into the trendline where we got a rejection asthe sellers stepped in with a defined risk above the trendline to position fora drop into the 140.00 handle. The buyers will need to see the price breaking abovethe trendline to regain some control and start targeting the 160.00 handlenext.

USDJPY TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the price broke below the upward minor trendline that was defining thebullish momentum on this timeframe. The sellers are likely to pile in aroundthese levels with a defined risk above the broken trendline to position for newlows. The buyers, on the other hand, will want to see the price rising backabove the broken trendline to start targeting the break above the majortrendline.

USDJPY TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, there’snot much else we can add here as the sellers will look to pile in as long asthe price stays below the broken trendline, while the buyers will want to seethe price rising back above the broken trendline to regain some conviction formore upside. The red lines define the average daily range for today.

UpcomingCatalysts

Today we get the latest US Jobless Claimsfigures, while tomorrow we conclude the week with the Japanese CPI.