USD/JPY Oscillates Around Y116.00

The initial sell-off sent USD/JPY to an intraday low of Y115.62 Wednesday, before the rate began to pare losses. The release of FOMC monetary policy meeting minutes supported recovery, as the document flagged potential for earlier, faster rate hikes. The pair finished the day only marginally below neutral levels.

• According to the Nikkei, the BoJ are mulling raising their FY2022 CPI forecast to the low +1.0% Y/Y range from the current +0.9% at their upcoming monetary policy meeting. The newspaper did not name the source of the information.
• Tokyo Gov Koike noted that she was not planning to ask the central gov't to introduce Covid-19 restrictions in the capital. Meanwhile, the NHK reported that the national gov't are looking to impose curbs in Okinawa, Yamaguchi and Hiroshima.
• Final readings of Japan's Jibun Bank Services PMI will be out shortly, with Tokyo CPI as well as earnings/spending data due tomorrow.
• USD/JPY sits at Y116.17 as we type, up 6 pips on the day. A clearance of Jan 4 high of Y116.35 would shift focus to the 2.00 proj of Apr 23 - Jul 2 - Aug 4 price swing at Y117.08. Bears see Jan 3 low of Y114.95 as their initial target, a break here would expose the 20-EMA at Y114.85.