For all the anticipation ahead of it, the reaction ended up being a rather tame one. And even more so in the FX market. The dollar was hardly changed at the end of the day, though is now sitting marginally lower. In terms of Fed pricing, there is a slight shift lower in the Fed funds futures curve but nothing too significant.
That being said, Treasury yields did move lower accordingly and that is weighing slightly on USD/JPY as it moves back towards the 147.00 mark and is now holding at key near-term levels:
USD/JPY vs US Treasury 10-year yields (%) hourly chart
The pair has been a key focus point for dollar sentiment all week, ever since the Monday gap lower after BOJ Ueda’s remarks on a “quiet exit” from ultra easy policy. Right now, price action is contesting the confluence of the 100-hour (red line) and 200-hour (blue line) moving averages. Keep above and the near-term bias holds more bullish but break below and that bias turns more bearish instead.
But in the bigger picture, the 145.00 mark remains the key line in the sand in determining the upside bias for the pair.
Elsewhere, EUR/USD is up 0.2% to 1.0747 but holding within a 17 pips range. GBP/USD is up 0.1% to 1.2500 but the range for the day is a measly 18 pips. That pretty much underscores the intensity of the moves, even if the dollar is marginally lower across the board.