• USD/JPY continues to bleed out following dovish FOMC minutes. 
• 138.50 is targetted to the downside for the immediate future. 

At the time of writing, USD/JPY is down 0.2% having fallen from a high of 139.60 and has reached a low of 139.25 into the Tokyo open with the greenback still reeling from a dovish set of Federal Open Market Committee meeting minutes.

Minutes from the Federal Reserve's November meeting showed that most policymakers at the central bank agreed it would soon be appropriate to slow the pace of interest rate hikes. In other key statements, the minutes showed that a slower pace of rate hikes would better allow the FOMC to assess progress toward its goals given the uncertain lags around monetary policy. A few participants said slowing the pace of rate hikes could reduce the financial system risks; others that slowing should await more progress on inflation.

The US Dollar index, as a consequence, has fallen more than 1% toward 106, the lowest since mid-August, as traders raise bets of only a 50 bps rate hike by the Fed in December. The move was fortified by poor data prior to the event. 

A slew of US economic data (including durable goods orders, PMIs, claims, new home sales, and final Michigan sentiment), for the most part, was solid but the emphasis was put on the shocking result in the US Manufacturing PMI that missed expectations by a mile:

• US: S&P Global Manufacturing PMI drops to 47.6 in November vs. 50 expected

''The minutes support our forecast that the top of the target range will peak at 5.00% next year,'' analysts at Rabobank said. ''However, while inflation may have peaked, we think its persistence poses an upside risk to our forecast.  It is also why we do not expect the Fed to pivot before 2024.''

USD/JPY technical analysis

The daily trendline support holding up so far.

Zoomed...

The price is trading between 138.50 and the wick to 137.65 on the downside and 142.25 on the upside.