- USD/JPY is inching higher to recapture its fresh 23-year high around 137.00.
- The DXY has strengthened on the expectations of a prolonged higher rates scenario in the US.
- Japan’s mixed Industrial production data has weakened yen further.
The USD/JPY pair is aiming to recapture its fresh 23-year high around 137.00 as the US dollar index (DXY) has strengthened on hawkish commentary from Federal Reserve (Fed) chair Jerome Powell. In his speech at European Central Bank's (ECB) annual Forum on Central Banking, Fed Chair Powell has continued dictating the Fed’s objective of bringing price stability to the US economy.
As per remarks from Fed Powell, the US economy is rock solid considering the overall demand and the tight labor market. This makes it efficient to bear the consequences of the rapid rate hike process. Accelerating price pressures have hit the real income of the households, however, the economy is strong enough to face the headwinds.
To contain the soaring price rise, the only measure is the announcement of interest rate hikes. However, the statement from Fed Powell that they don’t guarantee an inflation rate near 2% has spooked the market sentiment. This uncovers a prolonged upside for the US dollar index (DXY) as lower interest rates in the developed economy will be a bed-time story for the market participants. The DXY is advancing to reclaim its 19-year high at 105.79.
On the Tokyo front, mixed economic data has weakened the yen bulls further. The monthly Industrial Production figures have plunged to -7.2% vs. -0.3% estimated and the prior release of -1.5%. While the annual figure has improved to -2.8% from the consensus and the former release of -5.9% and -4.9% respectively.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats below 1.0700 after US GDP data
EUR/USD came under modest bearish pressure and retreated below 1.0700. Although the US data showed that the economy grew at a softer pace than expected in Q1, strong inflation-related details provided a boost to the USD.
GBP/USD declines below 1.2500 as USD rebounds
GBP/USD declined below 1.2500 and erased the majority of its daily gains with the immediate reaction to the US GDP report. The US economy expanded at a softer pace than expected in Q1 but the price deflator jumped to 3.4% from 1.8%.
Gold drops below $2,320 as US yields shoot higher
Gold lost its traction and turned negative on the day below $2,320 in the American session on Thursday. The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 4.7% after US GDP report, weighing on XAU/USD.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.