USD/JPY stabilize at 105.50, focus shifts to FOMC decision

Following a sharp up-surge to 106.50 region and a subsequent retracement, the USD/JPY pair seems to have found some buying interest around 105.00 handle that helped the pair move back around 105.40 area.

Earlier during Asian trading session, the pair witnessed a volatile swing before finally stabilizing above 105.00 handle after Japan's PM Abe finally confirmed the size of fiscal stimulus to be in excess of 28 trillion Yen and measure would be compiled by next week. 

On Tuesday, the pair plunged to a two-week low level of 104.00 on news that the Japanese stimulus could be much lower than what was being priced-in by the market.

The pair, however, found fresh bid after Wednesday's announcement and would be keenly awaiting for today's FOMC monetary policy statement, which will be followed by BOJ decision on Friday. Nevertheless, the pair seems all set to witness increased volatility in days to come. 

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Technical levels to watch

Weakness back below 105.00 handle now seems to drag the pair below session through support near 104.60 handle and take it back towards Tuesday's swing lows support near 104.00 region. On the flip side, sustained strength above 105.70-75 immediate resistance should assist the pair to easily surpass 106.00 handle and aim back towards session high resistance near 106.50 level.