• USD/JPY has made a pop back into the rising channel support in the 112.80's as the yen weakens across the board.
• USD/JPY had been as low as 112.63 post the Fed but was creeping higher in early Asia and bounced from 112.68 in the open today. 

USD/JPY caught an initial bid, (113.14 high), on the Fed but came under pressure eventually and sank below the rising trend line support to a low of 112.63 - (The dots point to 3.375% for 2020's Fed Funds peak and CPI to 2%). However, Trump's positive remarks on US-Japan trade talks should be supportive while the BOJ & GPIF will keep the upside underpinned - So a downside breakout is not the immediate favoured scenario at this stage while the US dollar takes up the advantage in the spread.

FOMC 'accommodative' removal from statement - dollar went lower, what's that all about?

Looking ahead, the US calendar remains lively with the Initial jobless claims, Durable goods orders and Q2 GDP - third estimate.

Q2 GDP, third estimate preview 

Analysts at Nomura explained that the Incoming data since the release of the BEA’s second estimate of Q2 GDP have been solid. The data on business equipment and nonresidential structures investment, government spending, and net exports have been stronger than the BEA’s assumptions. However, residential investment was likely modestly weaker than its assumptions. Altogether, we expect the BEA to revise up the Q2 real GDP estimate by 0.3pp to 4.5% q-o-q saar in its final report (Consensus: 4.2%). 

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the USD/JPY pair trades around 112.80, modestly down for the day, maintaining its longer-term positive outlook despite the absence of follow-through beyond the key 113.17 level, July's high:

"In the 4 hours chart, the pair remains above bullish moving averages, with the closest being some 100 pips below the current level. Technical indicators in the mentioned chart have eased within positive territory, with the Momentum now flat and the RSI heading lower at around 53, rather limiting the upside than suggesting a steeper decline ahead."