USD/JPY rattles post-Fed rate call, dumps back into 151.00
|- USD/JPY took a quick plunge into 151.25 after Fed held rates.
- FOMC sees slightly higher rates in the future than previously expected.
- Markets shrug off higher growth forecast, price in additional easing.
USD/JPY took a quick dive into 151.00 after the Federal Reserve (Fed) held its main reference rate at 5.5% as markets had broadly predicted. Risk-hungry investors are shrugging off higher-than-previous growth expectations and interest rate forecasts from the Federal Open Market Committee (FOMC). According to the FOMC, US Gross Domestic Product (GDP) growth through 2024 is going to be slightly higher than forecast, and year-end interest rates are likely to be higher than previously expected.
Despite upside shifts to the Dot Plot, the Fed still expects three rate cuts through 2024 for around 75 basis points, and markets are keeping hopes of near-term rate trimming to begin closer to the middle of the year. Fed Chairman Jerome Powell is due at the bottom of the hour at 18:30 GMT.
Read more: Fed leaves interest rate unchanged at 5.25%-5.5% as forecast
Fed Chair Powell noted that while inflation continues to ease down towards 2.0%, victory ultimately hasn't been achieved and uncertainty remains a key sticking point for the FOMC. Chairman Powell went on to specifically highlight that the Fed won't be putting too much emphasis on one or two months' worth of data. Chair Powell also flagged a slackening in the US labor market as a specific trigger necessary to kick off rate cuts.
Read more: Inflation eased substantially but ongoing progress is not assured
USD/JPY 5-minute chart
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.