USD/JPY retreats from highs, eases to 103.50 ahead of FOMC

After climbing to session tops near 103.70 during overnight trade, USD/JPY has now given away some pips and receded to the 103.60/50 band.

USD/JPY attention to FOMC minutes

The pair is looking to stabilize around current levels after recent fresh highs beyond 104.00 the figure following a broad-based USD upside.

In the meantime, the selling pressure around the Japanese safe haven seems to persist for the time being, although further JPY weakness remains unlikely in light of the scepticism surrounding the BoJ and its ability to spur inflation expectations.

In the data space, preliminary Machine Tool Orders have contracted at an annualized 6.3% in September. On the US data front, the only release of note will be the FOMC minutes from the latest meeting. Market consensus expects the Committee to deliver a somewhat hawkish statement, which could in turn support further the buck.

USD/JPY levels to consider

As of writing the pair is down 0.01% at 103.50 and a breakdown of 101.97 (20-day sma) would open the door to 100.07 (low Sep.22) and finally 99.53 (low Aug.16). On the other hand, the next hurdle lines up at 104.17 (high Oct.6) ahead of 104.33 (high Sep.2) and then 107.48 (high Jul.21).