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USDJPY Lower As FOMC Minutes Weaken USD

JPY

The yen strengthened against the USD overnight to below 140 on the broader USD pullback. But JPY was one of the mid-range G10 performers. The USD weakened after the FOMC minutes signalled a slowing in the pace of tightening. USDJPY is now trading around 139.55 below the 100-day simple MA of 141.16.

  • Lower US yields after the FOMC minutes and softer US PMI data also helped the yen. USDJPY still looks too low relative to yield differentials with the US.
  • The short-term trend for USDJPY remains bearish but initial support is at 139.64, the November 18 low. Resistance to watch is 143.52, the 50-day EMA, and a break through this would signal the possibility of a stronger correction.
  • Jibun Bank preliminary PMIs for November are published this morning. Department store sales for October also print. The US is closed for the Thanksgiving holiday.

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