USD/JPY strives to reclaim 145.00 as traders pare Fed large rate cut bets
|- USD/JPY aims to recapture 145.00 as Fed Powell smashes large rate cut bets for November.
- The US Dollar bounces back ahead of key US data.
- An absence of immediate plans for more rate hikes in BoJ’s SOP weighed on the Japanese Yen.
The USD/JPY pair gathers strength to extend its upside towards the crucial resistance of 145.00 in Tuesday’s European session. The asset witnesses strong buying interest as the US Dollar (USD) rises further amid uncertainty ahead of the United States (US) Purchasing Managers’ Index (PMI) and the labor market data for September this week, which will indicate whether risks of an economic slowdown are intact.
Market sentiment is cautious as traders rollback bets supporting another large interest rate cut from the Federal Reserve (Fed) in November. S&P 500 futures have posted some losses in European trading hours. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, climbs to near 101.00.
The Fed started its rate-cut cycle with a decline in interest rates by 50 basis points (bps) to 4.75%-5.00% last month. Market participants were anticipating the Fed to continue with an aggressive policy easing stance to prevent further deterioration in job growth.
However, the comments from Fed Chair Jerome Powell on Monday suggested that policymakers are not in rush for reducing interest rates quickly. Powell said that he sees interest rates further declining by 50 bps by the year-end, which indicates that there will be two 25 bps rate cuts in each of the remaining two meetings this year.
On the Tokyo front, the Japanese Yen (JPY) weakens as the Bank of Japan (BoJ) Summary Of Opinions (SOP) of the monetary policy meeting that took place on September 19 indicated that officials have no immediate plans to tighten interest rates further. The BoJ intends to maintain its accommodative stance but remains open to adjustments if economic conditions show significant improvement, BoJ SOP showed.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.