- USD/JPY gains ground near 155.60 amid a modest rebound of USD on Thursday.
- Many Japanese policymakers called for for steady interest rate to avoid the risks of inflation overshoot.
- Fed’s Collins emphasised the need to hold rates higher for longer to curb inflation, boosting the USD.
The USD/JPY pair trades in positive territory for the fourth consecutive day around 155.60 during the early Asian trading hours on Thursday. However, the fear of further intervention from the Bank of Japan (BoJ) is likely to cap the downside of the Japanese Yen (JPY) for the time being.
The BoJ board members decided to hold the key interest rate steady at 0% at its April monetary policy meeting. According to the Bank of Japan (BoJ) Summary of Opinions, board members turned hawkish at their April policy meeting, with many policymakers calling for a steady interest rate to avoid the risks of inflation overshoot. The statement highlighted BoJ Governor Kazuo Ueda's recent comments indicating the prospect of multiple rate rises in the coming months, as well as the possibility of an increase in short-term borrowing rates.
Early Wednesday, Japan's top currency diplomat, Masato Kanda, came with a verbal intervention, saying that he would take appropriate action if it’s necessary to prevent the JPY. Nonetheless, Kanda declined to comment on the FX intervention. The possibility of further steps from the Japanese authorities to prevent its currency might boost the JPY and cap the pair’s upside.
On the other hand, the monetary policy gap between the United States and Japan continues to support USD/JPY. Meanwhile, Boston Fed President Susan Collins stated on Wednesday that the interest rate will likely stay higher for longer, as it will take longer than previously thought to bring inflation down to target. The hawkish remarks from Fed officials lift the Greenback and act as a tailwind for the pair. Apart from this, traders will monitor the preliminary University of Michigan Consumer Sentiment Index on Friday, which is expected to drop to 76.0 in May from 77.2 in April.
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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.