Although US fundamentals remain firmly positive, USDJPY has failed to respond to the data, rejecting the 113.00 level and falling through the 112.00 figure in morning US dealing today. Aside from the usual geopolitical tensions between the US and North Korea, there seems to be something greater that is worrying the market and when there is a discrepancy between price action and news flow, it always pays to take notice.

The weakness in USDJPY may suggest that the markets are no longer convinced that a Fed rate hike is a done deal in December. Tomorrow’s FOMC minutes will reveal just how committed US policymakers are to a tightening regime. The market expects general hawkish consensus, but if the minutes show a wide array of opinions, with many FOMC members still undecided, then the buck could suffer more selling and test long-term support at the 111.50 level.