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  • The Fed rose rates to 2.00%-2.25% as expected.  
  • Chair Powell offered an upbeat tone of the US economy and thinks policy is still accommodative.
  • USD/JPY moving sideways, now down for the day but still unstable.  

The US dollar moved sideways without a clear direction after the FOMC meeting but it was modestly lower. It spiked to the downside after the statement and then to the upside with FOMC staff projections and at the beginning of Powell’s press conference.  

The USD/JPY pair reached 113.12, fresh 2-month high but then turned lower amid high volatility. As of writing was trading at daily lows 112.72. During Powell’s presser, the yen gained momentum across the board amid a retreat in equity prices in Wall Street and also on the back of lower US yields.  

The US central bank, as expected, raise the Fed Funds rate by 25bp. The statement removed the reference to policy being “accommodative” but then Powell mentioned that overall financial conditions remain accommodative. He added that the tightening cycle is a reflection of the strength of the US economy. The upbeat tone from Powell offered support to the greenback against most currencies, but it sent USD/JPY lower.  

USD/JPY Technical levels

On the downside, support could be seen at 112.70/75 (Sep 25, 26 low), 112.65 (short-term uptrend line), 112.40 and 112.15. While on the flip side, the 113.00 are continues to be a strong barrier followed by 113.15 (July highs), 113.35 and 113.60 (Dec 8, 2017 high).