USD/JPY nears weekly high post-Fed

The US Central Bank disappointed, but higher yields and equities keep the USD/JPY afloat.

Japan preliminary Mach Nikkei PMI expected at 54.3 from a previous 54.1

The USD/JPY pair keeps tossing and turning around the 106.30 region, trapped between higher equities and yields, and absent demand for the greenback. After the dust settles, the pair may well resume its downward trend, as it would need to recover beyond 107.00 to present a more constructive stance.

The US Central Bank rose its key rate benchmark by 25bps as expected, but the dot-plot suggests only three rate hikes for this year, against the four anticipated. Furthermore, the economic outlook for this year was left unchanged, with modest growth revisions for the upcoming years.  Still pending is Jerome Powell press conference and the following Q&A, but there's little he can say to change the fact that most members believe in just two more rate hikes ahead.

During the upcoming Asian session, Japan will publish the March preliminary Nikkei PMI, expected at 54.3 from a previous 54.1, alongside with the January All Industry Activity Index for February, seen down 1.7% from a previous 0.5% advance.

Technical Outlook

The pair is within its early week's range, with the top of it being 106.60, the immediate resistance ahead of the 107.00 figure. Beyond it, the pair has the 107.30/40 region where it has some relevant intraday highs from the past couple of weeks. To the downside, supports come at 106.00 and 105.60, ahead of the more relevant 105.24, the low set last February.