• USD/JPY rose above 149.00, gaining 0.20% on the day.
• US PPI from September accelerated, beating expectations.
• FOMC minutes from September will be released later in the session.

On Wednesday, the USD/JPY gained additional ground, rising back above 149.00. Hot Producer Price Index (PPI) failed to trigger a significant move on the USD, and the trajectory of the pair seems to be determined by the dovish stance of the Bank of Japan (BoJ). Later in the session, markets will monitor the Federal Open Market Committee (FOMC) minutes from the September meeting to look for clues on forward guidance.

In line with that, the September PPI from the US rose to 2.2% YoY, higher than the 1.6% expected and the previous 2%. On Thursday, the US will report the Consumer Price Index (CPI), with the headline and core measure expected to decelerate. Its worth noticing that each inflation data point is crucial for the Federal Reserve (Fed) and could generate volatility in the bond markets and in the USD price dynamics.

Regarding the minutes, investors will look for additional clues on the last decision of the Fed delivering a hawkish pause. Interest rate projections indicated that bank members have a high chance of an additional hike this year while rate cuts were delayed. In the press conference, Chair Powell was very clear, stating that the bank will remain data-dependent and ready to hike again if needed. 

USD/JPY Levels to watch 

 The daily chart analysis indicates a neutral to a bearish outlook for USD/JPY, as the bears show signs of taking control but still face challenges ahead. The Relative Strength Index (RSI) has a positive slope above its midline but with a clear downward trend, while the Moving Average Convergence (MACD) lays out neutral red bars. Additionally, the pair is above the 20,100, 200-day SMAs, suggesting that the bulls are in command over the bears on the bigger picture.

 Support levels: 148.66 (20-day SMA), 148.00, 147.30.

 Resistance levels: 149.50, 150.00, 150.50.

USD/JPY Daily Chart