USD/JPY hits two-week lows, weakens farther below 109.00 handle

• The USD continues to be weighed down by Wednesday’s dovish FOMC tone.

• JPY further benefits from upbeat domestic data and added to the selling bias.

• Absent relevant economic data unlikely to provide any respite to the USD bulls.

The post-FOMC USD selling pressure remained unabated on Thursday and dragged the USD/JPY pair further below the 109.00 handle to fresh two-week lows.

The pair extended last week's rejection slide from the key 110.00 psychological mark and kept losing ground for the fourth session in the previous five as investors digested a more aggressive dovish message by the Fed on Wednesday.

The Fed hinted that it may be at the end of its rate-hike cycle and further surprised the market by issuing a separate statement regarding its balance sheet and indicated that its efforts to reduce the $4 trillion asset portfolio could end sooner than expected.

The latest FOMC policy update cast doubt on the prospects of any rate increase this year and prompted some aggressive US Dollar selling, which was seen as one of the key factors behind a follow-through selling through the Asian session on Thursday.

Meanwhile, today's better than expected Japanese industrial production data helped offset the prevalent risk-on mood, which tends to dampen the Japanese Yen's relative safe-haven status and did little to lend any support or ease the bearish pressure surrounding the major.

Today's relatively thin US economic docket, featuring the second-tier release of usual initial weekly jobless claims and Chicago PMI seems unlikely to provide any immediate respite for the USD bulls, through might still be looked upon for some short-term momentum play.

Technical levels to watch

USD/JPY

Overview:
    Today Last Price: 108.78
    Today Daily change %: -0.16%
    Today Daily Open: 108.95

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