USD/JPY: 105 broken on weak dollar post FOMC pre BoJ

USD/JPY has kept with the offer in the open of Tokyo while the greenback has given back recent gains due to the FOMC outcome where markets have concluded that the Fed will not be hiking until at least December.

The FOMC was less dovish than June's meeting but there the US economy will need to continue improving for the Fed to act. They could hike as soon as September perhaps, but for the meantime markets will go with current events such as today's poor US data in durable goods and home sales data. "Market pricing of the Fed funds rate slipped a little, now implying a 25% chance of a rate hike in September, a 55% chance by December, and 100% by Oct 2017, explained analysts at Westpac earlier. 

We now turn attentions to the BoJ tomorrow to end the Asian week ahead of US GDP on Friday that could be impacted heavily by the durable goods overnight that fell by 4.0% in June (vs -1.4% expected).

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USD/JPY levels

The break of the 105 handle has exposed the 4hr 100 and 200 SMAs, 104.38 and 104.03 respectively. 102.87 is the 12th July lows ahead of 102.44 support area. To the upside, 106.71 remains the key target guarding 107.50 and 20th July highs.