A subdued session for the JPY this morning with all attention on the FOMC statement tonight. Dollar-yen started near Y98.19 after some decent activity overnight and strong bids from investors carried the pair up to a Y98.28 high in New York, aided also by gains in Nikkei futures. The move higher paused ahead of the 100-day moving average (Y98.37) and the pair eased a few notches to Y98.15 in early Asian trade. A better-than-expected reading for industrial output gave dollar-yen a mild lift as did a positive open in Japanese stocks and the pair gained close to the overnight high again. Residual offers above Y98.30 capped the move through the session before dollar-yen eventually consolidated near the morning low, at Y98.14 as the market sat back to wait for the FOMC. Euro-yen meanwhile was also trapped in a narrow range, between Y134.77 and Y135.03. The cross drifted back from the morning high as dollar-yen retreated, and was last at Y134.87. A break above the Y135.50 level is needed to shift focus higher to tests of the Y138.70-80 region last seen in Oct 2009 while a break below the Y133.60 level would see the immediate focus shift lower to tests of the Y131.00-10 region.
