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USD/JPY has been sold off in the Tokyo opening hour, but not by much. USD/JPY opened at 112.28 and has made a session low of 112.23 with a high of 112.33 having started out on the bid.  

USD/JPY is not doing anything whereby the trade war and various geopolitical headlines are being soaked up by investors. the greenback is virtually stationary and remains heavy as the commodity-complex takes charge in a risk-on environment, regardless of various key political matters remains unbalanced, including Brexit, NAFTA and the US/China trade dispute.

Bulls keep calm and carry on

USD/JPY was trading in a narrower range overnight while flows were supported by China saying it won’t devalue CNY. the Shanghai performance enabled Wall Street to continue higher and eyes  are on a break to 113.18 if the pair can get and hold above 112.38, as being the 76.4% of the July-Aug drop.

FOMC outlook; (Standard Charted analysts preview  the FOMC):

“We expect the FOMC to upgrade its median real growth projection at the September meeting, and see a decent chance that the Committee’s median non-accelerating inflation rate of unemployment (NAIRU) estimate will decline too. However, we believe that for the rest of this year, the median ‘dot plot’ (FOMC FFTR projection) will continue to understate what the FOMC will ultimately do in 2019, with the median dot plot for 2019 reflecting four rather than three hikes only in March or June 2019, mirroring the 2018 dot-plot evolution. The Committee likes to upgrade its FFTR outlook gradually to avoid abrupt tightening in financial conditions. Unforeseen risks could emerge in 2019, but, we believe the FOMC sees the US economy as less fragile than investors do. Moreover, we expect the FOMC to keep hiking even if core inflation remains benign. Since monetary policy works with a lag, we believe the Committee will be compelled to respond to accelerated growth momentum to keep inflationary pressures and financial stability risks in check.”

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the pair holds at the upper end of its weekly range, losing some upward potential according to technical readings in the  4 hours chart:

“Technical indicators are retreating from their daily highs but well above their midlines, as moving averages remain well below the current level and with the 100 SMA gaining upward strength above the larger one. The positive sentiment could fade on a break below 112.15, August high and the immediate support, while the upward potential will likely increase on an advance beyond 112.60, the immediate short-term resistance.”