- The USD/JPY pair rose immediately after the release of the FOMC.
- US dollar strengthened after Fed’s delivers a not so dovish rate hike.
The USD/JPY pair climbed from 112.20 to 112.45 after Fed’s decision but then pulled back to the level it had before the statement. The spike higher was boosted by a rally of the US dollar across the board while the retracement from the top took place on the back of a stronger yen.
The Japanese currency gained momentum as equity prices in Wall Street turned sharply to the downside after the Fed’s meeting. US stocks reversed and turned lower, erasing most of the day’s gains.
The US central bank, as expected, rose the key interest rate to 2.25%-2.50%. It signaled two rate hikes for next year against the three of the previous meeting. The tone and the statement could be seen as not as dovish as expected. Now attention turns to Powell’s press conference that will start at 19:30 GMT.
USD/JPY Short-term levels to watch
To the downside, immediate support could be seen at 112.00/10 (Dec 19 low) and below at 111.60 (Oct 15 low). On the upside, resistance levels might be located at 112.45, 112.60 (daily high) and 112.85.
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