Yesterday the USDJPY fell sharply after the Consumer Price Index (CPI) figures in the U.S., but then retraced the bulk of the decline after the FOMC announcement, in a boomerang market move.

The CPI announced at GMT 12:30 came in at 0.0% month on month versus expectations of 0.1%, and 3.3% year on year versus expectations of 3.4%. In addition, the core month-on-month figure came in at 0.2% versus expectations of 0.3% and at 3.4% year on year versus expectations of 3.5%. Taken as a whole, the figures suggested a weakening of inflation, which led in turn to a fall in the USDJPY. At around GMT 16:30, the price hit a low of 155.71 yen.

As expected, the FOMC that came out later left policy rates unchanged. Furthermore, in the dot plot that shows the views of FOMC members on the outlook for policy rates up to the end of the year, the central value was for a single rate cut, lower than the previously expected double cut, which provided fuel for dollar buying. The result was that by the close the USDJPY had recovered to 156.90.

Today the USDJPY opened at 156.67 before trending upward, hitting a high of 157.04 shortly after GMT 03:00.

Looking at the 1-hour chart of the USDJPY (as of GMT 03:25 on June 13), the CPI caused the price to fall to the -2 standard deviation of the Bollinger Bands, but it rebounded after the details of the FOMC had been grasped to break above the middle line.

(20-period Bollinger Band, showing ±1 and ±2 standard deviations)

Today's main economic indicators are as follows.

• GMT 12:30 U.S. May Producer Price Index (PPI, MoM)
• GMT 12:30 U.S. May Producer Price Index (PPI, YoY)
• GMT 12:30 U.S. May Producer Price Index (core PPI excluding food and energy, MoM)
• GMT 12:30 U.S. May Producer Price Index (core PPI excluding food and energy, YoY)
• GMT 12:30 U.S. Initial jobless claims for the previous week
• GMT 12:30 U.S. Continuing jobless claims for the previous week