Ticks Away From Seven-Week Low

USD/JPY continued to head lower yesterday, taking out the key Aug 19 low of Y105.10 in the process. Cross-flows from a sharp sell-off in EUR/JPY may have added fuel to the move, as the latter cross breached its 50-DMA. The monetary policy decision from the FOMC failed to inspire any meaningful recovery in USD/JPY, despite broader gains in the greenback. Little in the way of local catalysts to help the yen, with the expected formal appointment of Yoshihide Suga coming to fruition.

• NHK circulated a report this morning pointing to a draft document prepared by a group of LDP lawmakers, urging the government to tighten its grip on disputed Senkaku/Diaoyu islands also claimed by China.
• USD/JPY has added 8 pips returning above the Y105.00 mark and last sits at Y105.03. A move through the 20-EMA at Y105.83 would turn focus to Sep 3 high of Y106.55. Meanwhile, with the rate hovering just above its seven-week low of Y104.81 printed yesterday, bears target that level initially. Next support is at Y104.19, the low of Jul 31.
• The latest monetary policy decision from the BoJ takes focus today, while CPI data headlines the Japanese docket on Friday.