Dollar/yen extended its losses from the previous week but remains entrenched in range. Mixed signals from the Fed weighed on the pair. The upcoming elections in Japan also cause confusion. What’s next? A lot depends on further Fed-speak.

USD/JPY fundamental movers

Fed hesitance

The FOMC meeting minutes did not point to a “no hike” in December but certainly showed that officials are worried. These doubts were echoed separately by Evans of the Chicago Fed and Bostic of the Atlanta Fed.

US data was mostly positive.

In Japan, we did not get any meaningful figures to rock the boat, but Japanese politics is heating up. The Governor of Tokyo is challenging PM Abe and this could cause uncertainty. Nevertheless, recent polls show she is losing some support.

Yellen, housing data and more

After we had our bout of consumption and inflation, the focus in the US moves to housing figures with a variety of numbers. Also, watch out for a speech by Yellen on the weekend and other Fed officials during the week.

Key news updates for USD/JPY

Updates:

USD/JPY Technical Analysis

113.50 was a temporary line of resistance on the way up in July. 113.70 was a separator of ranges in June.

112.20 used to be important in the past. It is closely followed by 111.80, which capped the pair in May. The swing high of early September at 111.30 serves as another point of interest.

Looking down, 110.70 was a separator of ranges in June and remains important. 109.60 was a gap line in late April, a gap that was never closed.

In June, the pair found support several times at 109.10 and this also works as support. Further below, the cycle low of 108.10 is of high importance.

The trough of 107.35 seen in early September serves as another cushion on the way down.

USD/JPY Daily Chart

(Click on image to enlarge)

USD/JPY Sentiment

I remain bearish on USD/JPY

After the big rise from the lows, the pair peaked and may now extend its falls. Doubts about the Fed’s moves weigh.