The minutes of the FOMC meeting knocked down the pair USD/JPY, the yield in the US falls

The consequences of yesterday's publication of the minutes of the meeting of the Federal Committee for open market operations differed slightly from the official statement of the FOMC at a meeting in early May. Then the Fed spoke of "symmetry" to describe the goal of inflation. This was probably regarded as an unwillingness to intimidate the market, because it could calculate that the Fed will react too energetically to further inflation growth, because the inflation target of 2.0% is already looming on the horizon.
This time (in any case, judging by the reaction of profitability in the US and the increase in expectations about the Fed's rate hikes), the tone of the protocol was more "dovish", since the Fed apparently agrees to "suffer" a high inflation rate of 2% "long" time, before raising rates further.
The conclusion is that the US central bank seems to be strongly inclined to not cut the recovery period and make sure that inflation remains within the target range.
The very sharp reaction of the US yield in the form of its decline was just as muffled, but this does not apply to the pair USD/JPY, which experienced a new and strong sell-off wave at night, which caused the pair to fall to new local lows and to a level below 110.00. Judging by the dynamics, the level of 110.00 for the pair USD/JPY is too much, and the currency pair could fully rise to high levels if the yield in the USA was also high now.

The Japanese central bank kept interest rates unchanged

The Japanese central bank kept interest rates unchanged. Members of the Monetary Policy Committee voted 8 to one for this decision.
The central bank also said the economy is growing moderately. And while the inflation rate remains below the Bank's targets, there has been substantial progress in price growth. Central bankers are of the opinion that this trend in inflation will remain.
The central bank's inflation target is at a 2% unreachable level at this stage.
The Japanese economy is growing moderately, the financial institution said in a press release at the end of a two-day meeting at which interest rates were kept at a negative value of minus 0.1%.
Consumer price growth stood at 0.8% in October on an annual basis, following an increase of 0.7% in September. The world's third largest economy is expected to grow 2.5% in the three months to September on an annual basis.
The decision of the Japanese bank did not surprise the market. The dollar continued to trade without any significant change over the Japanese yen after the decision at levels of about 113.42 yen per dollar.

Fluctuating dollar following the announcement of the tax cuts in the US

The dollar appreciated against most currencies on Tuesday, thanks to optimistic data from US building permits, but profits were limited by doubts about the overall impact of the country's main tax revision plan. The Republican Chamber of Deputies approved a large-scale tax bill on Tuesday, then the bill passed through the Senate and was approved. The majority in the US Senate is Republican, and this has made it easier to accept the project.
Green money rose against the yen, and against the euro depreciated after parliament approved the bill.
At the beginning of the session, the dollar appreciated as US housing data reported a 13-month high in November, while data on single-family houses struck a 10-year high. At the end of the session, green money was 0.28% higher against the yen to 112.85 yen. The euro grew slightly against the euro, with the single currency closing the session at 1.18399, which is 0.51% higher than on Monday.

Wells Fargo: Short-term weakness of USD/JPY

Wells Fargo Securities chief strategist Erick Viloria predicts further weakness of the dollar against the yen in the short term in an interview with Bloomberg.
The reason for these expectations is the political uncertainty in Europe and other parts of the world that can make investors look for the yen as a safe haven.
The head of the Japanese central bank said on Thursday that the institution will continue its accumulation policy until the inflation targets are met. This is happening in an environment of rising interest rates from the Fed, which makes the situation favorable to the dollar against the yen.
Nevertheless, Viloria points to the previous few interest raises, in which market participants "bought on rumors and sold on news". That is to say, that the difference in the policies of the two central banks - the US and the Japanese - is already calculated in USD/JPY trading levels.

UOB remains in short positions in dollars

Forex strategists at the UOB Group believe that in the coming weeks, the probability for testing the level of $108.00 on dollar/yen will fall.
While the bank's analysts say that 108.00 is very strong support and is unlikely to pass the level so easily, the strong rally over 108.11 was unexpected. The upward movement has the potential to expand, but the pace of each recovery is expected to be slower, analysts said. Therefore, strong resistance above 109.30 will not be a surprise, with the next resistance at 109.80 being unlikely to be tested in the coming days.
The bank's stops at their short positions are at 109.30, as the move above this level will not be a surprise, the bank said. According to analysts, the probability of a new test is increased to 108.00 or lower. Otherwise, the chances of a downward break will continue to decline, experts write.

USD/JPY continues to fall

If the EUR/USD pair after the publication of an interview with Trump is growing, but remains within the usual dianpazon, in USD/JPY the discontent of the President from the strong national currency and sympathy to the policy of low interest rates leads to a decline to new lows, say analysts.
With the start of the Asian session on Thursday the pair has not undergone significant changes, as there were offers for purchase at 108.80 and the balance of risks remains in favor of a reduction to 107.86 (61.8% of the growth from 11/11/2016).

TD Securities prefers to stay in the camp of bulls for the dollar

Asked whether the glass is half empty or half full, and whether the current consolidation of USD/JPY has paused, strategists at TD Securities adhere to the camp of optimists.
In the bank noted that the pair remains above the important support near 110 and it is expected that the statistics from the US this week will support bulls in US currency, especially if the yield on ten-year government bonds remain above 2.3%.
In TD Securities connect strengthening of the yen in recent times with the activities of hedgers and repatriation of capital by Japanese investors and expect that the started a new financial year in Japan will lead to a negative character for the Japanese currency.
At the same time the positive signals from economic reports are expected to contribute to increased overall risk appetite, as their weakening last week also affect the yen.
In TD Securities advised to use attempts to reduce the USD/JPY to 110 for tactical purchases with expectations for growth to 113.50, as the bank adhere to forecast for second-quarter level of 114, but expect a return to 112 and 110 over the next two quarters.

UOB: Chances for a breakthrough of USD/JPY below 110.00 fall substantially

In light of recent changes in the price of USD/JPY, the pair can reach the bottom near the psychological level of 110.00, suggest currency strategists at UOB Group.
The major support at 110.00 still remains as the dollar rose sharply from the minimum at 110.15. The further expansion of the correction to 111.50 seems likely, but it has strong resistance level and a break above this level is a low-probability. Support is at 110.75 and then at 110.40.
Support key level of 110.00 helped the Bulls to gather strength indicating a sharp recovery in the dollar from the minimum at 110.15. The recent downward pressure lose weight but needs the dollar to break above 111.50, to show that it has formed a short term bottom. In other words, it is too early to expect a sustained recovery, although a break below 110.00 is unlikely, analysts say.

Deutsche Bank: Details of what will be the growth of the dollar against the yen

The upward trend in the pair USD/JPY is unlikely to go smoothly. It should contain smooth adjustments, analysts said. As demonstrated by the December report of the State Pension Investment Fund of Japan (GPIF), Japanese investors will provide strong support for the USD/JPY close to the level 110.00, but it is unlikely that they will act as a driving force that will allow prices to go above 115.00 in the near future, for example if the Fed raise rates in March, the course may briefly rise above indicated resistance, but then there is a likelihood of downward movement, according to analysts.
Nevertheless, they support the view that in long-term USD/JPY will go up after the increase in interest rates in the US. American economists of the bank expect that the Fed will raise rates this year in March, June and September and 3 more times next year. This will be the determining factor for the upward movement of USD/JPY.
The exchange rate of USD/JPY should be increased to 115 after the increase in interest rates in March and then to gain a foothold in the range of 115-118 after the increase in interest rates in June and break above 120.00, due to higher interest rates in September.

UOB sees range for the yen

USD/JPY consolidates and this will continue over the next 1-3 weeks, according to currency strategists at UOB Group.
While the couple is moving to the top of last Friday at 115.45, it is not expected to rise above that level, analysts say. The dollar reached a peak of 115.61, but quickly fell from the top, reaching a minimum, they added.
At the same time, positive expectations weakened slightly, but it is too early to expect a sustained rebound. The bank switched to a neutral stance and expressed the view that the recovery of the US dollar may move to 115.45/50, but it quickly came back.
Inability to break up is not surprising, so that the bank continued to maintain a neutral position and expect the dollar to trade in a wide range.

BTMU don't believe in sustainable growth of the yen

BTMU currency analysts expect that the yen will lose up momentum for next month. The yen has stabilized after receiving support from the press conference of the newly elected US president Donald Trump which focuses on strengthening the protectionist trade policy.
The correction of the yen so far this year has been relatively small compared to its sharp decline, seen at the end of last year, analysts say. At this stage the bank analysts believe that the weakening of the yen is likely to be temporary and will be seen only in the short term. This will require a reversal in terms of initial optimism, the analyst added.
After Trump took office there was a rally. For comparison, the wave of optimism of investors who welcomed the introduction of Abenomics at the end of 2012, continued until 2014, experts write.

US bulls with new rally

The US dollar continued its bullish run after the Fed raised interest rates. The greenback reached its strongest level in 14 years. For the last three months the dollar index rose by 3%, and for the last 4 months - by nearly 10%.
USD/JPY passed the barrier of 118 and now investors expect next target of 120, so as parity of EUR/USD. Janet Yellen gave a forecast for the new three raises of interest rates next year. This to some extent would lead to major problems for central banks around the world, including higher costs for debt service, higher inflation and falling of exchange rate. Emerging markets were hardest hit by capital outflows in search of higher yields and higher costs for servicing of dollar-denominated debt. In combination with the weak euro, yen and other major currencies this may have negative effects on the world and lead to slower growth, which will eventually overtake also the US economy.
Currently the strong dollar poses a major risk for the US economy, especially in terms of raising interest rates in the country. If the administration of Trump did not come quickly with a major fiscal stimulus package, the euphoria will fade and this will be the beginning of fluctuation for the US economy.

UOB forecast range for USD/JPY

According to currency strategists at UOB Group the forecast for USD/JPY remains bullish and suggests a period of consolidation before further growth. They say that the fluctuations of the US dollar yesterday made a mixed outlook. Further, it is expected fluctuations to be in the range of 112.84/114.77.
The bank already have closed their long positions in the pair and have a neutral opinion about it today, they do not expect any change in the opinion of analysts. The pair is currently moving around in its early stage of the consolidation phase, as it will probably go to a very wide range of 111.50/115.00, analysts say.

Three-week rally in the dollar against the yen is the biggest since 1995

Today is Friday - the last trading day of the week. If the dollar against the yen at the moment ended the day near current levels, this would be the most significant three-week rise since 1995 of the US dollar against Japanese rival, analysts say.
The opening of the markets after the celebration of Thanksgiving in the US was marked by continued growth in yields of US Treasury bonds. This pushed the USD/JPY up in Asian session, they added.
Markets calculated in the price the likelyhood of raising interest rates by the Federal Reserve in December long ago. But the flow of strong economic data continues to affect positive mood. Currently 64% of market participants expect another increase in US interest rates until June 2017, except for December, analysts reported. Earlier this week, the probability was 58 percent and half month ago - twice as low.
Technically USD/JPY now appears extremely overbought. 14-day indicator RSI (relative strength index) for 10 consecutive sessions held in the area more than 70%. Moreover, there are no signs of a possible reversal or correction, analysts conclude.

Nikkei is up for the 6th consecutive session due to the strengthening of the dollar against the yen

Japan's Nikkei index rose for the sixth consecutive session on Thursday because of hopes for growth of earnings of Japanese exporters against the background of rise of the dollar against the yen.
The dollar rose after upbeat economic data in the US, which further strengthened the likelihood of the Fed raising rates.
Nikkei closed the trading session rising by 0.9 percent to 18.333.41 points.
The broader Topix index also gained 0.9 percent, ending trading session at 1.459,96 points and showing an increase for 10th consecutive session.
Index JPX-Nikkei 400 gained 0.9 percent to 13.105,50 points.
USD/JPY is currently trading at 113.32 yens per dollar.

The markets have calmed down and the dollar stopped growing

The dollar has stopped the rise and traded steadily against other currencies in quiet trading on Friday as investors have recovered from the shocking results of the voting in the United States, and became even optimistic considering the choice of Americans to the country's economy.
The EUR/USD fell by 0.30% to 1.0852. On Wednesday, the pair jumped to 1.1298, the highest level since September 8, before returning to 1.0902.
The dollar was supported as investors revised their initial expectations for Trump presidency. Market participants expect an increase in costs and increase in inflation during the administration of Trump.
The dollar showed an increase after on Thursday the US Department of Labor said the number of initial applications for unemployment benefits for the week ended November 5 fell by 11000 to 254000. Analysts had expected a decline in the number of initial applications by 5000 to 260,000 last week.
The Mexican peso continues to fall, MXN/USD pair fell by 1.44% to a fresh record low at 0.0479.
At a press conference on Wednesday the governor of the Mexican central bank said that the institution is watching the market volatility, but refrain from any national currency stabilization measures.
GBP/USD pair rose by 0.85% to 1.2595, the highest level since 6 October.
The pound was supported, as some British politicians have declared that they intend to vote against the negotiations on Brexit, after a court stated that the UK government must obtain parliamentary approval to initiate the process of exit from the EU.
Pair USD/JPY fell by 0.49% to 106.66, holding near a three-month high on Thursday at 106.94.
Australian and New Zealand dollars fell, AUD/USD pair fell by 0.33% to 0.7541 and the pair NZD/USD fell by 0.29% to 0.7106.
Pair USD/CAD rose by 0.27% to 1.3536, holding near a seven-month high at 1.3525.
USD index, which shows the relationship of the US dollar to a basket of major currencies, was steady at 98.84, remaining at the 2.5-week high on Thursday at 99.08.

Dollar rises in price against the euro, while remaining at a maximum of 7 months

During today's Asian trade, the US dollar rises in price in tandem with the euro, while remaining at a peak since March on expectations of rate hikes by the Federal Reserve System in December.
In October, the dollar showed growth in pairs with all the currencies of developed countries, for Bloomberg the dollar index this month was the best since 2008 - an indicator added 2.2%.
Euro to 6:25 GMT was worth $1.0969 compared with $1.0981 at the close of the North American market.
The chances of increase in the Fed rate to the end of 2016 increased to 71.4% with less than 60% at the end of September. The market confidence in recent days was reinforced by published positive data, including the dynamics of US GDP in the 3rd quarter, and income and expenses of Americans in September.
The dollar against the yen is stable - 104,80 yen against 104.82 the previous day.

BTMU: USD/JPY remains in range to the US elections

Analysts at Bank of Tokyo-Mitsubishi UFJ have a neutral view on USD/JPY, as they look to the next week and expect the pair to move between ¥102.50 and ¥104.50, while consider possible a risk of appreciation of the exchange rate.
Trading on the USD/JPY remains stable. All major markets, the yen bonds and the Exchange's Nikkei are stable, indicating low volatility and turnover in the past two weeks, analysts say.
Next week the yen will be bought by exporters, analysts said.
Their operations may increase at the end of the month, while the yen will likely be sold by Japanese investors who can keepthe pair to the lower border of the range of the rise in the exchange rate of USD/JPY, they added.
The dollar is unlikely to be strong on the eve of the US presidential election, experts write.

BNP Paribas sell USD/JPY with target 97.00

While  Goldman Sachs maintained their forecast for USD/JPY at ¥108 level, BNP Paribas sell USD/JPY with target 97.00.
Bank analysts expect renewed weakness of the US currency due to disappointment from the meeting of the Federal Reserve last week (21 September). They believe that the market will probably continue to calculate in the prices the fact, that the Fed will delay further tightening of monetary policy. In the short term real yields on US should remain low and the positioning of the dollar has the potential to increase. At the same time risky assets (shares) should continue to decline, analysts say.Even if the Fed raise rates in December, analysts believe that the dollar is at risk of weakness in the coming weeks.
Therefore, in the short term they prefer to take a tactical short position in the pair USD/JPY. They emphasize that this is a short recommendation, which is not in contradiction with their forecast level of 108.00 at the end of 2016.

Goldman Sachs maintained their forecast for USD/JPY at ¥108 level

Last week was marked by the meeting of the Bank of Japan, which had a huge number of conflicting views of economists and market participants about what exactly did the regulator and what this means for the Japanese economy and markets.
Bank analysts agree, that it is unlikely that the new policy to be more effective than the previous in terms of stimulating the economy. For this the market will need to convince on promises of Kuroda for inflation over 2%, while long-term incentive policy failed to reach 1 percent, analysts say.
At the same time they do not agree with the fact that the Bank of Japan will not use more stimulus, or that they will reduce them. On the contrary, in their opinion, change of the course of monetary policy speaks for determination of the regulator to face the situation and to ensure that incentives will finally reach the real economy.
Currently the trade in yen is complexed. According to estimates of analysts the yen is close to its long-term "fair" exchange rate against the dollar and it is therefore preferable for the currency to be sold against the dollar than against the euro. Along with the decline in inflation expectations in Japan compared with the United States, means that this year the yen is more attractive than the dollar.
Currency strategists at Goldman Sachs maintained three months forecast for USD/JPY at ¥108 level. It is based on the assumption that the FOMC will realize the need for higher nominal interest rates, together with rising inflationary pressures. This, together with the commitment of the Bank of Japan to achieve the target level of inflation, should lead to a change in yield in favor of the dollar.