FxWirePro: USD/JPY prints three-day downtrend, dollar weakens as Fed minutes show decelerating pace of rate hikes

Chart - Courtesy Trading View 

USD/JPY was trading 0.56% lower on the day at 138.78 at around 05:45 GMT. The pair is extending a three-day downtrend, has retraced below the daily cloud.

Federal Open Market Committee (FOMC) minutes released on Wednesday showed majority policymakers vouched for decelerating pace of interest rate hikes.

A broad-based US Dollar weakness ensued after the FOMC minutes. The 10-year US Treasury yields have slipped below 3.69% as investors see no continuation of 75 basis points (bps) rate hike spell.

Analysts expect Fed chair Jerome Powell will likely shift to a half-percent rate hike extent for December’s monetary policy meeting.

Further, chatters of a gradual opening in the dragon nation after renewed Covid lockdowns seems to have weighed on the dollar's haven demand.

USD/JPY trades with a bearish bias. The major is set to extend weakness after failure to extend gains above 110-EMA. 

Breach below cloud has raised scope for further downside. Next major support is seen at 200-DMA at 133.82.