USD/JPY drops further after Fed’s meeting and ahead of tariffs announcement

• US Dollar weakened across the board after the Federal Reserve left rates unchanged.
• USD/JPY extends losses below 111.50 ahead of an announcement regarding US tariffs.

The USD/JPY pair was moving with a bearish bias before the meeting and dropped further following the release of the statement. It bottomed at 111.41, a fresh daily low. It was trading at 111.45, more than 70 pips below the weekly high it reached earlier at 112.13.

The Fed left its target range rate at 1.75-2.00% as expected, in a unanimous decision. According to the central bank, the US economy is strong and left the doors open to a September rate hike.

The slide of the US dollar could also be attributed by the announcement that will take place at 19:30 GMT at the White House regarding tariffs. According to Dow Jones reports, Trump will announce an increase in tariffs for Chinese products from 10% to 25%.

A decline in equity prices in Wall Street and a move to the downside in US yields also helped the move lower in USD/JPY. The US 10-year yield is back under 3.0% while the Dow Jones is down 0.30%.

USD/JPY Levels to watch

To the downside, support levels might be seen at 111.25 (Jul 26 & 27), 111.00 and 110.70/75 (Jul 23 & 27 low). On the other direction, immediate resistance could be located at 111.65 followed by 111.95 (Jul 31 high) and 112.20.