- USD/JPY moves higher to 155.00 as US Dollar bounces back.
- Investors await the US Data to get cues about when the Fed will pivot to interest rate cuts.
- The BoJ is projected to raise interest rates only one more time by year-end.
The USD/JPY pair advances to historic highs of 155.00 in Wednesday’s London session. The asset strengthens as the US Dollar finds support amid uncertainty ahead of the United States Q1 Gross Domestic Product (GDP) and the core Personal Consumption Expenditure Price Index (PCE) data for March, which will be published on Thursday and Friday.
The economic data will significantly influence market expectations about when the Fed will start reducing interest rates.
The market sentiment is asset-specific as S&P 500 futures have added some gains in the European session, while risk-perceived currencies drop against the US Dollar. The US Dollar Index (DXY) adds some gains after discovering buying interest near 105.70.
On Tuesday, the US Dollar corrected sharply after the S&P Global reported a weak US preliminary PMI report for April. The agency reported that the Manufacturing PMI remains below the 50.0 threshold that indicates a contraction and the Services PMI falls sharply. This has suggested that strong US economic outlook is losing some heat.
In today’s session, investors will keenly watch the Durable Goods Orders for March. Orders for Durable Goods rose by 1.4% in February. Durable Goods Orders include those products that have life span of three years or more. Strong Durable Goods Orders indicate a stubborn inflation outlook.
Meanwhile, the Japanese Yen weakens as investors expect that the Bank of Japan (BoJ) will not continue raising interest rates this week. Last time, the BoJ pushed interest rates to 0%-0.1% after maintaining a super easy monetary policy for 17 years. A Reuters poll showed that the BoJ will tighten policy further once this year and is expected to keep it stable till the June meeting.
Fears of Japan’s intervention in the FX domain to support the sliding Japanese Yen deepen. In the early European session Senior Japan Ruling Party Executive Ochi said, "There is no broad consensus right now, but if the yen slides further toward 160 or 170 to the dollar, that may be deemed excessive and could prompt policymakers to consider some action" Reuters reported.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades sideways below 1.0450 amid quiet markets
EUR/USD defends gains below 1.0450 in European trading on Monday. Thin trading heading into the Xmas holiday and a modest US Dollar rebound leaves the pair in a familair range. Meanwhile, ECB President Lagarde's comments fail to impress the Euro.
GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision
GBP/USD trades on the defensive below 1.2600 in the European session on Monday. The pair holds lower ground following the downward revision to the third-quarter UK GDP data, which weighs negatively on the Pound Sterling amid a broad US Dollar uptick.
Gold price holds comfortably above $2,600 mark; lacks bullish conviction
Gold price oscillates in a range at the start of a new week amid mixed fundamental cues. Geopolitical risks continue to underpin the XAU/USD amid subdued US Dollar price action. The Fed’s hawkish stance backs elevated US bond yields and caps the pair’s gains.
The US Dollar ends the year on a strong note
The US Dollar ends the year on a strong note, hitting two-year highs at 108.45. The Fed expects a 50-point rate cut for the full year 2025 versus 4 cuts one quarter earlier, citing higher inflation forecasts and a stubbornly strong labour market.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.