Important events today:

13:30 UTC – US: Core Personal Consumption Expenditures Index.

The U.S. Federal Reserve provided fresh statistics on the U.S. banking system. Dollar liquidity decreased by $27.9 billion due to transactions by the U.S. Treasury and the Fed. The Fed is slamming the brakes and shrinking its bond portfolio more slowly than it should. For example, the portfolio shrank by $39.2 billion in June, against a target of $95 billion. On the one hand, the Fed’s conservative actions have led to a modest reduction in dollar liquidity in the financial system.

On the other hand, Powell said firmly this week that the regulator will continue to shrink the bond portfolio and one might conclude that the volume of transactions will be high during periods when Janet Yellen’s agency will hold small Treasury bond auctions. Apparently Powell and Yellen have agreed that they will not interfere with each other. Thus, the dollar liquidity will now decrease by $25-30 billion every week on average, which is positive for the USDJPY.

Recommendations: Buy 144.30/144.00 and TP 145.20.