Friday, 21 December 2018 14:06 WIB | CURRENCIES |USD/JPY,
The USD/JPY pair reversed an early dip to the 111.00 neighborhood and has now recovered a part of previous session's slump to 3-1/2 month lows.
The post-FOMC US Dollar selloff, coupled with the global flight to safety prompted some aggressive selling on Thursday and dragged the pair to an intraday low level of 110.81, the lowest level since Sept. 7.
The Fed signalled fewer interest rate hikes in 2019, than projected previously, and pushed the long-term US Treasury bond yields to near nine-month lows and affected negatively on the greenback.
Adding to this, Thursday disappointing release of Philly Fed Manufacturing index and the threat of a partial US federal government shutdown further dented the already weaker sentiment surrounding the buck.
Meanwhile, growing concerns over the health of the global economy triggered a fresh wave of risk-aversion trade, which was evident from a steep fall in the US equity markets and benefitted the JPY's safe-haven status.
The bearish pressure, however, abated and the pair managed to find some support near the very important 200-day SMA after US Treasury Secretary Mnuchin said that markets overreacted to the Fed's comments.
The greenback regained some positive traction on the last trading day of the week and was seen as one of the key factors assisting the pair to stage a modest recovery from near-term oversold conditions.
Moving ahead, today's US economic docket, highlighting the release of durable goods orders and the final Q3 GDP growth figure, will now be looked upon for some fresh impetus during the early North-American session.
Source : FX Street