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Dollar/yen just is on the up and up. The major pair continues rising and has reached 111.27. The next line of resistance is the former triple-bottom of 111.60. It is followed by 112.20 and 113.

The main driver remains the Fed decision. Not only did the Fed raise rates despite falling inflation, but they also dismissed this slowdown as due to one-off factors. They left the path of interest rate hikes unchanged and expressed confidence on the economy.

That was on Wednesday evening and the effect continues on Friday morning. The greenback is gaining ground also against more stubborn currencies but USD/JPY stands out. The pair often reacts in a stronger manner to US-related events.

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BOJ in the background

What about the yen side of the equation? The Bank of Japan also convened, but it left its policy unchanged. The interest rate remains a negative -0.1% and the bond-buying scheme remains unchanged. The team led by Kuroda continues aiming for a 0% yield on 10-year bonds.

Some had expected the BOJ to begin talking about the end of the program. They did acknowledge that households are spending more, but prices are not really rising.

JGB purchases are dropping by the BOJ, but they are ready to buy what is necessary. They will be there.

Here is how the move looks on USD/JPY. We were under 109 before the Fed, and things have radically changed.