USD/JPY consolidating near two-month tops, awaits FOMC meeting minutes

The USD/JPY pair seems to have entered a bullish consolidation phase and oscillated within a 15-pips narrow trading range just above mid-113.00s.

The pair continued gaining traction through European trading session on Wednesday amid persistent USD demand, lifting the key US Dollar Index further beyond the 96.00 handle. 

The pair moved higher despite escalating geopolitical tensions, especially after N. Korea successfully tested intercontinental ballistic missile on Tuesday. Meanwhile, modest gains in European equities pointed to some signs of stability in financial markets and weighed on the Japanese Yen's safe-haven appeal, which eventually collaborated to the pair's up-move to the highest level since May 16. 

   •  Further escalation of the North Korea crisis – Danske Bank

However, retracing US Treasury bond yields were seen capping further gains for the major ahead of the FOMC meeting minutes, due for release later during the NY session. 

   •  FOMC minutes in the limelight – Nomura

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the 4 hours chart shows that the price remains well above its moving averages, but also that technical indicators have lost upward momentum near overbought levels,  rather reflecting the ongoing consolidation that suggesting upward exhaustion."