USD/JPY on the offers below 113.50 on neutral Fed, awaits BOJ

The USD/JPY pair is seen clinging onto the 113 handle, entering a phase of bearish consolidation in Asia, after a sharp drop witnessed overnight in response to the Fed decision.

The US dollar slumped across the board in tandem with the treasury yields, after the Fed hiked rates by 25 bps to a range of 0.75% to 1% as widely expected, with markets adopting ‘Sell the fact’ strategy. Moreover, the verdict was seen as more neutral than hawkish, as the FOMC committee left the Dot plot unchanged for the coming years.

The spot has stabilized somewhat around 113.35 levels, as attention now turns towards the BOJ policy decision due out later this session. The BOJ is expected to leave its monetary policy settings unchanged today. Following the BOJ policy announcement, Governor Kuroda’s press conference will be closely eyed for fresh cues on the bank's policy approach.

USD/JPY Technical levels to watch             

The major finds immediate resistance at 113.74/81 (20-DMA/ daily pivot). A break above the last, the major could test 114.24/31 (5 & 10-DMA) and 114.90/115 (Fib R2/ zero figure) beyond the last. While to the downside, the immediate support is seen at 113.16/ 113 (2-week low/ round number) next at 112.80/71 (key support/ classic S1) and below that at 111.67/57 (Feb 26 & 7 low).