Due to the “Trump rally,” the dollar surged, and the USD/JPY exchange rate rose to 154.71 yen early in the morning. However, it soon began to fall. Finance Minister Mimura commented that “the current state of the exchange market is one-sided and rapid” and that he is “watching closely with a strong sense of urgency.” With the rate nearing 155 yen, concerns about possible intervention grew. Ahead of the FOMC meeting, this led to a dollar adjustment, causing USD/JPY to decline, reaching 152.86 yen just before the meeting.
Although the FOMC meeting was somewhat hawkish, which caused the USD/JPY to bounce back to 153.47 yen, dollar-selling pressure remained strong, limiting further increases. While Fed Chair Powell made some slightly hawkish remarks under the Trump administration, the dollar’s rise remained limited, with the USD/JPY closing at 152.70 yen.
The rapid dollar-buying under the Trump rally is expected to calm down for a while, with the 155-yen level seen as a near-term ceiling due to concerns about intervention. Powell also mentioned that it is too soon to judge the impact of the Trump administration’s fiscal policies on the Federal Reserve, suggesting that the Fed’s current stance on rate cuts will likely remain.
The dollar adjustment is expected to continue.
USD/JPY Forecast Range: 153.80 yen – 152.00 yen
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