USD/JPY clings to gains above 106.00, FOMC eyed

The Japanese yen remains on the defensive today, allowing USD/JPY to extend the rebound above the 106.00 handle.

USD/JPY attention to FOMC, BoJ

Shrinking risk aversion has removed some upside pressure from the safe haven JPY today, prompting sellers to cash up recent gains and allowing at the same time a recovery towards the vicinity of 106.40.

Spot will take centre stage in the upcoming hours, in light of the FOMC meeting and Thursday’s BoJ gathering. Both central banks are seen ‘on hold’, although the investors’ attention will be on the release of updated forecasts for US growth and rate hikes path.

USD/JPY levels to watch

As of writing the pair is gaining 0.09% at 106.22 facing the immediate hurdle at 107.92 (high Jun.7) followed by 108.54 (20-day sma) and then 108.92 (55-day sma). On the other hand, a breach of 105.63 (low Jun.14) would aim for 105.52 (2016 low May 3) and then 105.18 (low Oct.15 2015).