USD/JPY's initial knee jerk reaction to the 'as expected FOMC outcome', spikes to 111.99 option barrier lvl

Currently, USD/JPY is trading at 111.94, up 0.30% on the day, having posted a daily high at 111.99 and a low at 111.10.

Live Coverage: FOMC September 20th

FOMC's decisions regarding monetary policy implementation - Sep 20, 2017

FOMC statements: Comparison between July and September

Prior to the outcome of the FOMC, bears were taking back control and marking fresh pre-FOMC lows for the US session, in pursuit of London's low of 111.23. However, on the outcome of the FOMC, USD/JPY has spiked to 111.99 the high on the initial knee-jerk reactions in the markets.  

FOMC main takeaways:

With the dot plot of the Fed's funds rate as the main focus, the FOMC continues to forecast one more hike in 2017, three more in 2018.

• The Federal Reserve left rates in the 1.00%-1.25% range.
• The Fed announced that it will begin to unwind of $4.5 trillion balance sheet in October.
• Hurricanes unlikely to affect the medium-term path of the economy.

Correlated reactions: 

• US ten-year yields have picked up to 2.2340 at the time of writing, but still -0.47% on the day.
• The DXY has dropped to 91.65 at the time of writing.
• Stocks are mostly unchanged
• Gold has dropped to $1,305.86 the low.

USD/JPY levels 

While the market reaction is fairly volatile, levels on the wide are most critical. However, it is worth noting that USD/JPY bulls have been held up prior to this outcome of the meeting at 111.87, struggling to clear the top of the cloud at 111.61 and had been buckled by option related offers ahead of 112 barriers. 

Prior to the meeting, the technicals had been turning somewhat lower and bears were gunning for a reversal after USD/JPY failed to get above 111.75 on a daily closing basis which is the 61.8% retrace of the 114.49 to 107.32 July-September supply, despite breaking above there yesterday. On the wide, 112.22 is located at the 200-day ma and the top of the range is located at 114.38/49. 110.95/20 has been a previously supportive range. 110.62 is the daily cloud base ahead of the previous downtrend at 109.13 before the 108.13 April low and the recent low at 107.32. 

Next in focus, Yellen presser and then BOJ meeting: 

BOJ Preview: As Low a Risk Event as it Gets

(Note: BoJ Gov Kuroda will hold a press conference at 02.30ET).