USD/JPY Continues to Carve Lower-Highs Despite Hawkish Fed Rhetoric

Japanese Yen Talking Points

USD/JPY is back under pressure, with the exchange rate slipping to a fresh monthly-low of 112.76, and recent price action raises the risk for a larger correction in dollar-yen as the exchange rate continues to carve a series of lower highs.

Image of daily change for major currencies

USD/JPY Continues to Carve Lower-Highs Despite Hawkish Fed Rhetoric

Image of daily change for usdjpy rate

USD/JPY struggles to hold its ground despite the limited reaction to the U.S. Producer Price Index (PPI), which showed the headline reading slipping to 2.6% from 2.8% per annum in August, but the broader outlook for dollar-yen remains supportive as Fed officials continue to prepare U.S. households and businesses for higher borrowing-costs.

Fresh remarks from New York Fed President John Williams, a permanent voting-member on the Federal Open Market Committee (FOMC), suggest the central bank will stick to its hiking-cycle as ‘further gradual

increases in interest rates will best foster a sustained economic expansion and achievement of our dual mandate goals,’ and Chairman Jerome Powell Co. may continue to strike a hawkish tone at the next interest rate decision on November

Article source: https://www.dailyfx.com/forex/fundamental/us_dollar_index/daily_dollar/2018/10/10/USDJPY-Weakness-to-Subside-as-Bearish-Sequence-Snaps.html