Fed worried 'premature tightening' could hurt inflation objective credibility Minutes from the last Federal Reserve meeting state, "Participants weighed a number of risks associated with the timing of policy firming. Some participants were concerned that the downside risks to inflation could be realized if the target range for the federal funds rate was increased before it was clear that economic growth would remain at an above-trend pace and downward pressures on inflation had abated. They also worried that such a premature tightening might erode the credibility of the Committee's inflation objective if inflation stayed at a rate below 2 percent for a prolonged period."
FX Action: USD-JPY continues to ply a narrow trading range FX Action: USD-JPY continues to ply a narrow trading range, struggling to retake the 120 handle, though not able to move under 119.80 either. Given the ongoing Japanese data misses (most recently a slide in machine orders), the prospects for further BoJ stimulus at the end of October would seem to be on the rise. As a result, analysts can likely anticipate the market pricing this event into USD-JPY in the coming sessions, with risks certainly looking to be to the upside for the pairing.