USD/JPY: testing the bull's commitments at 110 the figure

Currently, USD/JPY is trading at 110.08, down -0.12% on the day, having posted a daily high at 110.24 and low at 109.89.

Summertime market's mood soured by Trump - ANZ

USD/JPY fell from 110.95 to 110.03 overnight after not only the FOMC minutes, but earlier in the session the move commenced after Trump disbanded two business advisory councils following CEO defections, and again after the FOMC minutes. Subsequently, US 10yr treasury yields fell from 2.28% to 2.22%, 2yr yields from 1.36% to 1.32% while Fed fund futures yields slipped, pricing the chance of a December rate hike at around 43% (from 47%), as noted by analysts at Westpac.

FOMC minutes reviewed by Westpac analysts:

"In the FOMC minutes of the July meeting, "most" officials see inflation picking back up to 2% over the next couple years and "many" see recent low inflation as a function of idiosyncratic factors, signalling that the central mass at the Fed continues to favour another hike before the year is out. That said, Fed cohesion on this front seems weaker than previously, the more cautionary group now amounting to "some". They argue the Fed can "afford to be patient", while "several" indicate that the risks to inflation could be tilted to the downside and "many" see some likelihood that inflation could remain below 2% for longer. With this group apparently larger and more vocal than past meetings, markets are reading the minutes with a dovish bias. On the balance sheet, "several" are agitating for a July start but "most" prefer to defer a decision until the next meeting (i.e. Sep 20)," 

USD/JPY levels

From a technical point of view, Valeria Bednarik, chief analyst at FXStreet explained that the pair reverted most of its Tuesday's gains, and seems poised to fall further, particularly on a break below the psychological 110.00 threshold.  "In the 4 hours chart, the price broke below its 100 SMA with a strong volume candle, while technical indicators pulled back from overbought levels and approach their mid-lines almost vertically, supporting the case of a downward extension for the upcoming hours."