USD/JPY retreats from weekly high as Fed Chair Powell adopts a neutral tone
|- USD/JPY hits a new weekly high of 149.96 before retreating 0.13% to trade at 149.75.
- Fed Chair Jerome Powell's dovish remarks led to a decrease in expectations for additional tightening by the Fed.
- Chances for a rate hike in January 2024 trimmed from 50% to 40% following Powell's comments.
USD/JPY turns negative after hitting a new weekly high of 149.96 but retreats 0.13% after dovish remarks of the US Federal Reserve (Fed) Chair Jerome Powell, amid a risk-on impulse, as seen by Wall Street’s posting gains. Therefore, the pair is trading at 149.75 at the time of writing.
USD/JPY shifts negative following dovish remarks from Jerome Powell
Jerome Powell’s words moved the markets, while expectations for additional tightening by the Fed faded, as the chances for a rate hike in January 2024 were trimmed from 50% on Wednesday to 40% on Fed Powell’s remarks.
Fed Chair Jerome Powell commented that the committee would proceed “carefully” in setting monetary policy, as evidence of above-trend growth would warrant further monetary policy tightening. He added that the policy is restrictive and acknowledged that inflation remains too high. He said the labor market is too tight, and markets have been frontrunning the US central bank policy changes.
Data-wise, the US agenda revealed the tight labor market after unemployment claims for the last week hit 198K, below forecasts and previous figures, at 212K and 211K, respectively. Simultaneously, the Philadelphia Fed Manufacturing Index showed business conditions in the region are crumbling, sparking fears of a possible economic downturn.
On the Japanese front, exports rose to a record high in September, rising for the first time in three months, as auto factories increased their shipments to the US and Europe. Exports estimates were at 3.1%, but figures rose by 4.3%. In the meantime, Japan’s top diplomat, Masato Kanda, said there was an “international agreement” that authorities could intervene in the Forex markets if there were excessive moves.
USD/JPY Technical Levels
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.