Fundamental Outlook for the USDJPY

The Japanese yen was seen weaker against the US dollar in the currency market afternoon trading sessions, as it traded at 100.95 at 2:26 pm. The Japanese yen previously hit a high of 100.14 in an earlier session subsequently orbiting levels around 99.68 against the dollar before it began its decline. The pair was also seen reaching 101.00 levels last week.

Analysts also anticipate the yen going higher in the immediate future. This was stated on Tuesday on CNBC following the disappointment stemming from the Bank of Japan’s (BoJ) stimulus arrangement. "Without the Federal Reserve Board doing the heavy lifting (with a U.S. interest rate hike) and with the Japanese economy seemingly immune to monetary and fiscal stimulus, it will take little more than a few consecutive session probes below 100 yen for traders to be hotly testing the BOJ's resolve, while knocking on the post-Brexit spot level at 99.02 yen," said Stephen Innes, a senior trader at OANDA.

Japanese manufacturers most likely received some support from the relatively weaker Japanese yen as Toyota shares climbed 2.23% higher during the trading session, and Honda mounted a 3.38% advance. Canon also joined the party with a 1.27% rise in its share price. Another electronics manufacturer shares that was on the rise is Sharp, whose acquisition was finalized earlier this week by Taiwanese manufacturer Hon Hai after a regulatory approval from China’s anti-trust body.

The dollar on the other hand is currently in decline against a basket of major currencies. It was trading at 94.93 at 3:47 pm edging away from a drop lower in the earlier trading session where it had reached a low of 94.725, however it still remained below the levels above 95 through the Asian trading hours on Tuesday.

"Fed Presidents [William] Dudley and [Dennis] Lockhart warned that the market is underpricing tightening and rates could rise this year ... yet based on the price action of the dollar, investors are not buying what [they] are saying," Lien said, adding the market was looking instead at soft U.S. data and using them as "arguments for why rates will remain unchanged this year."

"Investors dumped U.S. dollars today, pushing the greenback lower against all of the major currencies," said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, in a note late Tuesday.

A report from Reuters on Tuesday implied that the New York Fed President Dudley and the Atlanta Fed Chief Lockhart both stated publicly that the possibility of the Fed raising short-term interest rates at its meeting in September is not entirely gone.

In other market events oil prices falters afresh in Wednesday Asian trading session, after a previous rise of almost 2% on Tuesday, with an extra uptick received from a relatively weaker dollar and more OPEC news.

Japan's benchmark Nikkei 225 index rose 0.9% to close at 16,745.64 as Chinese stocks were muted after a long-delayed scheme connecting Shenzhen and Hong Kong's stock exchange was approved.

The benchmark Shanghai Composite closed flat at 3,109.55 while in Hong Kong, the Hang Seng index ended trading down 0.5% at 22,799.78.