The Japanese currency is actively strengthening against the US dollar. In other cross-pairs, the yen behaves much more modestly, which indicates that the downward movement of the USDJPY pair is due to the widespread weakening of the greenback. A political factor is also present, but in this case it plays an auxiliary, secondary role.

Expectations regarding the minutes of the November meeting of the Fed were justified: the regulator, on one hand, confirmed its readiness to raise the rate in December, but, on the other hand, showed apparent hesitation in the matter of further actions. Weak inflation again became the focus of attention, although a few months ago Janet Yellen assured the market that the Fed would continue to hike the rate, even despite low inflation rates.

Now the position of the head of the Fed does not have the same significance, since in February its place will be occupied by Jerome Powell, who has his own opinion on this issue. The market is confident that the new head of the Federal Reserve will copy the policies of his predecessor. But, in my opinion, Powell is more reserved and cautious in his decisions. The opinion is the same about him and his colleagues. In his speeches, he repeatedly mentioned weak inflation as a risk factor, so it is too early to talk about any rate increase in 2018.

Here it is still necessary to remember that the November meeting was held even before the release of the CPI data for October, where the decline was recorded to 0.1% on a monthly basis and to 2% in the annual basis. It should also be taken into account that Stanley Fischer, who under certain conditions could insist/persuade his colleagues to take a more decisive stance, did not take part in the meeting in November. And at the beginning of next year William Dudley, who likewise defended the process of normalizing monetary policy, will also depart the Fed.

Moreover, at the November meeting lone appeals (for now) were voiced to postpone the issue of tightening monetary policy until inflation takes a clear course towards achieving a two-percent level. This means that the consumer price index should demonstrate consistent and consistent growth dynamics next year, similar to the dynamics of the labor market.

All this suggests that a cautious approach will dominate among the members of the Fed. The market correlated the published minutes with the latest inflation release and concluded that tightening of rates at the December meeting should not be expected. Given the circumstances, against the background of problems with the adoption of the tax reform, finally weakened the dollar.

Paired with the yen, the greenback demonstrated the strongest decline, approaching the bottom of the 111th figure. This is because the market has again increased interest in protective assets. The long-standing conflict between the United States and North Korea resurfaced once more as President Donald Trump added North Korea to the list of countries supporting terrorism. It should be noted that in this list, in addition to the DPRK, there are only three states - Syria, Iran and Sudan.

This decision is not a mere formality. The assignment of the status is followed by additional sanctions, trade restrictions, fines and so on. Although North Korea is also under the pressure of sanctions, Trump's decision has a wider meaning - a kind message of those countries that are ready yet to support Kim Jong-un's regime (particularly China). North Korea has not responded yet, but no one doubts that there will be no "repentant" step from them. Consequently, geopolitical tensions can increase again.

But at the moment, the problem of relations between these countries is not as actively discussed as several months ago. This is just a background, which supports the yen in conjunction with other factors. To determine the price levels, let's look at the technical picture of the pair.

In terms of technique, the pair is in the Kumo cloud of the Ichimoku Kinko Hyo indicator and under the crossed lines Tenkan-sen and Kijun-sen, forming the "Dead Cross" signal. These signals indicate that the pair is dominated by a bearish trend, and the boundaries of the Kumo cloud of the Ichimoku Kinko Hyo indicator are the closest support levels. Also, the pair trades under the bottom line of the Bollinger Bands indicator, which is in the extended channel. The bottom line of the indicator coincides with the line Senkoy Span B and also acts as a resistance level. With further development of the southern impulse, the main goal of the bears will be the lower boundary of the Kumo cloud, which corresponds to the level of 110.30. At the moment, it is not yet appropriate to discuss the lower target levels.