- USD / JPY is witnessing some selling for the second day in a row on Wednesday.
- Hopes for additional US fiscal stimulus continue to weigh on the USD and put pressure on the pair.
- Risk appetite sentiment does little to offer support as the focus shifts to the FOMC’s monetary policy decision.
The pair USD/JPY has seen new sales at the start of the European session on Wednesday and has fallen to fresh five-week lows, around the 103.30 region.
The pair has extended the losses of the previous day and has witnessed some sales for the second day in a row Tuesday in the middle of a softer tone around the US dollar. Progress towards a U.S. government massive spending bill has kept USD bulls on the defensive near two-and-a-half-year lows, which, in turn, has been seen as a key driver. that puts pressure on the USD / JPY pair.
Top US Congressional leaders began a second meeting on Tuesday to reach a $ 1.4 trillion spending settlement and end a showdown over the aid package for coronavirus. This, coupled with a weaker tone around US Treasury yields, has weighed further on the dollar. USD / JPY has fallen to its lowest level since September 9 and it does not appear to be affected by market optimism.
Global risk sentiment has remained supported by the latest optimism about the launch of coronavirus vaccines. Apart of this, renewed hopes that the UK will reach a Brexit deal it has further boosted investor confidence. However, the money flow of risk appetite has done little to weigh on the safe-haven Japanese yen or lend any support to the USD / JPY.
Market participants are now waiting for the release of the US monthly retail sales figures to give some breathing room for the USD bulls. However, the key focus of attention will remain on the latest monetary policy update from the FOMC. The Fed is expected to announce its decision during the American session today, which will play a dominant role in influencing USD price dynamics in the short term.
USD / JPY technical levels
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