FxWirePro: USD/JPY comatose at 200-DMA support ahead of FOMC policy decision

Chart - Courtesy Trading View 

USD/JPY was trading rangebound at 200-DMA support, with session high at 135.73 and low at 135.28.

Market sentiment was somewhat lifted on Tuesday after data showed U.S. consumer price index (CPI) inflation eased more than expected in November, indicating that inflation has likely peaked. 

US dollar gains were limited, USD crosses popped across the board as caution kicked in ahead of the Federal Reserve meeting on Wednesday.

The central bank is expected to raise interest rates by 50 basis points (bps). Traders will focus on the statement for clues on any potential changes to the Fed’s hawkish stance against inflation.

Data from Japan showed factory sentiment worsened in Q4 amid rising cost pressures, while that in the services improved. 

The Bank of Japan’s Tankan Large Manufacturers Index read 7 in the three months to December, slightly better than expectations for a reading of 6 but below last quarter’s reading of 8. 

While the sentiment index gauging the outlook for the sector also worsened to 6 in the fourth quarter from a prior reading of 9.

Capital expenditure also slipped further during the quarter, with growth in the Tankan All Big Industry CAPEX index falling to 19.2% from 21.5% in the prior quarter.

USD/JPY recovered from 2-week lows at 134.65, finds major support at 200-DMA, breach below will plummet prices.