USD/JPY: Yen bulls tighten grip as risk-off intensifies

FXStreet (Mumbai) - The Japanese yen keeps appreciating sharply versus the US dollar in the European morning, on the back of renewed risk-aversion wave as European stocks plunge in response to the recent Fed decision.

USD/JPY drops further from 119.60

Currently, the USD/JPY pair -0.48% lower at 119.45, hovering close to fresh weekly lows struck at 119.33 in last hours. The major remains heavy in the early dealings, dropping nearly 100 pips from the impulsive spike to 120.40, reached in early Asia.

The US dollar halted its recovery mode and resumes its post-FOMC bearish momentum, dragging the USD/JPY lower. While the persisting risk-off sentiment was accentuated by the falling stocks on the European bourses, increasing bids for the safe-haven in the yen.

Meanwhile, markets are expected to keep mulling over the Fed verdict amid a data-quiet trading session on Friday. The Fed left rates unchanged at its Thursday meeting, with the dot plot read much more dovish than at the June meeting.

USD/JPY Technical levels to consider

To the upside, the next resistance is located 120.03 (Aug 26 High) levels and above which it could extend 120.39 (Today’s High). To the downside immediate support might be located at 118.83 (Sept 8 Low) below that at 118.65 (Sept 7 Low).