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USD/JPY continues looking unstoppable, and it now it took another round number: 109. The pair  consolidated its gains that followed the FOMC dollar rally and stayed under 109 for some time.

The move seems to be a mix of another dollar move higher, together with a downgrade of economic forecasts by the Japanese government.

Japan sees a pause in private consumption, flat exports, a weak trend in industrial output and already doubts a post-tax-hike bounce. This is quite worrying: the sales tax hike in April was supposed to be a small bump in growth, but it could now be seen as a game changer.

This downgrade was certainly expected, but the actual declaration might imply further stimulus. If we get more monetary stimulus, this means a weaker yen.

However, the recent weakness of the yen could reach exaggerated levels for Japan.

And now, the pair the break higher. It reached a high of 1.0945 before sliding a bit down, but the pair maintains the 109 level. The big prize ahead is of course the 110 level. For more, see the USDJPY forecast.

And  here is the chart, showing the relentless rally:

USDJPY September 19 2014 above 109 dollar yen technical analysis currency