On the previous day, the US dollar weakened against the yen, but yesterday traders waited for the FOMC meeting.
As expected, the Federal Open Market Committee (FOMC) decided to cut interest rates by 0.25%. After the announcement, USD/JPY dropped to the mid-145 level. The dot chart showed a forecast of two more cuts this year. Chair Powell also pointed out risks in both inflation and the labor market, saying there was no need to act quickly on rates. This pushed USD/JPY back up to the 147 level.
There was also some relief that the Fed did not give in to pressure from President Trump.
Although strong expectations for more rate cuts have faded, the Fed is still in an easing stance, so upside for USD/JPY is limited. The market is now focused on tomorrow’s Bank of Japan (BOJ) meeting. The BOJ is expected to keep rates unchanged, and while Governor Ueda’s comments may draw attention, the market reaction may also be limited, just like with the FOMC.
USD/JPY forecast range: 146.40 – 147.50 yen
Note: This information does not guarantee profits. Please make your own decisions when trading.