USDJPY Drops AgainThe US Dollar dropped more than 3% against the Japanese Yen yesterday as the Fed struck a less hawkish tone than many were expecting at the May FOMC. The Fed warned that it was still set on easing rates but had not yet gained enough confidence in inflation. In a comment clearly aimed at curtailing hawkish speculation, the Fed said that a rate hike was highly unlikely to be the bank’s next move. Weak USD Post-FOMCThe outcome of the meeting will no doubt be welcomed by the BOJ and the Japanese government following the suspected intervention in FX markets at the start of the week. Japanese currency official Kanda has refrained from commenting on the moves for now, instead saying that full disclosure will be made at the end of next month. Intervention RisksTraders have been on the lookout for intervention since USDJPY moved above the level at which the bank last intervened in September last year. After testing 160, USDJPY crashed lower by around 500 pips. Traders now have that level in mind as the line in the sand. Despite the intervention, however, USDJPY has failed to move lower with the pair back in the green today as bulls attempt to drive price back up. US Jobs Data NextLooking ahead, focus now turns to tomorrow’s US labour market data with risks of a fresh push higher if we see any upside surprise in the readings. In this event, however, risks of fresh intervention are seen on any return to 160. Technical Views USDJPYThe reversal lower in USDJPY has struggled to break below 154.89 for now, with the pair finding strong support at the level. Momentum studies have turned lower, raising risks of a deeper push to the downside. If seen, the bull channel lows and the 151.81 level will be key support to watch. 
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