USD/JPY: rallies to fresh ten-month highs in Tokyo on FOMC hawkishness

Currently, USD/JPY is trading at 117.51, up 0.32% on the day, having posted a daily high at 117.56 and low at 116.95.

DXY rallied about 0.6% higher after the FOMC's hawkish announcements and dot plot that went from two to three for 2017. USD/JPY subsequently spiked from 115.35 to 116.45 and made a 10-month high of the event before rallying further to 117.69 in early Asia and in the Tokyo high.  US dollar index hits 13-year highs after Fed rises rates

Analysts at Westpac offered a full run down of the Fed here: "The FOMC raised the Fed funds rate by 25bp to a 0.50%-0.75% range, unanimously expected. The dot plot projection shows a clear upward drift: an additional hike for 2017(up from two), although the three hikes in each of 2018 and 2019 are unchanged.  The longer term neutral median rate is now 3.0%, up from 2.875%, reversing a long series of downward revisions. The statement betrays a Fed that sounds more "confident" on inflation, noting "Inflation has increased", vs "Inflation has increased somewhat" and that, "Market-based measures of inflation compensation have moved up considerably", the Fed adding "considerably" to that line. Elsewhere risks are still seen "roughly balanced" (no change from previous statement), there were no dissents and the guidance still calls for  "gradual" rate increases. Overall, the main surprises for markets were the raised dot plot projection and stronger inflation language."

USD/JPY levels

Current price is 117.52, with resistance ahead at 117.56 (Daily High), 118.63 (Weekly Classic R3), 121.08 (YTD High), 122.70 (Annual High) and 125.62 (3 Year High). Next support to the downside can be found at 117.41 (Yesterday's High), 117.14 (Daily Open), 117.00 (Weekly Classic R2), 116.95 (Daily Low) and 116.29 (Daily Classic R3).

Watch the Fed as it happened: