The USD/JPY currency pair recovered early losses and rose to around 148.00 during Friday’s European trading session, supported by continued US Dollar (USD) strength.
Key Drivers
✅ US Dollar Strength
- The US Dollar Index (DXY) climbed to approximately 97.63, marking the third consecutive daily gain.
- The rally follows the Federal Reserve’s policy decision on Wednesday, where the Fed cut interest rates by 25 basis points to 4.00%–4.25%.
- The Fed’s dot plot shows expectations for rates to fall further to 3.6% by year-end, suggesting two more rate cuts are likely in 2025.
📅 Upcoming Event
- San Francisco Fed President Mary Daly is scheduled to speak at 18:30 GMT. Markets will be watching for clues about the pace of future interest rate cuts.
Japanese Yen Movement
Earlier in the day, the Japanese Yen (JPY) strengthened briefly after the Bank of Japan (BoJ) announced its latest monetary policy decision:
- BoJ held interest rates steady at 0.5%, as expected.
- BoJ Governor Kazuo Ueda stated: “We will continue to raise the policy rate if the economy and prices move in line with forecasts.”
This suggests the BoJ is open to future rate hikes, depending on economic performance.
Summary of Economic Indicators
| Event | Outcome |
|---|---|
| Fed Interest Rate Decision | Cut by 25 bps to 4.00–4.25% |
| Fed Outlook | Two more rate cuts likely in 2025 |
| BoJ Interest Rate Decision | Held steady at 0.5% |
| BoJ Guidance | Open to hikes if economy improves |