USD/JPY: back to consolidate after Fed volatility ahead of BoJ

As reported here, the Fed was an easy call this meeting around and markets behaved rationally to it. 

"Staying short of stocks, scalping out a long dollar position and fading gold on a cautiously optimistic Fed, taking profits before consolidating back to a neutral market outlook and position ahead of the BoJ tomorrow and US GDP Friday."

USD/JPY followed suit, with a rally in the dollar, USD/JPY scored highs of 106.49 before heading back to a neutral position while stocks and gold fell, supporting the yen again ahead of tomorrow's BoJ decision and US GDP on Friday. The Fed were cautiously optimistic with the statement explaining that the near term risks to the economic outlook have diminished and that the economy is expanding at a moderate pace. This has lead to speculation in the markets that September could be the month that the Fed hikes rates on a continuation of improvements in the economy. 

USD/JPY levels

107.49's recent high on 20th July still marks the target for bulls on action from the BoJ perhaps while the downside remains as the 103.55 mid June low. On a break of this range, to the upside, 108.78 is the 78.6% retracement, guarding 111.45 May high while 102.44, 11th July low is a key downside target.

FOMC today, BoJ tomorrow: The Fed's mantra unveiled offers an insight to the BoJ tomorrow and some alternative thoughts on the Fed going forward.