USD/JPY continues to face pressure above 148.00, investors await Fed Powell’s speech

The USD/JPY pair trades subduedly near 148.00 during the European trading hours on Monday. The pair has been facing selling pressure above 148.00 from almost two weeks.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls back after struggling to extend its recent recovery move above 97.80.

The USD Index gained sharply in past few trading days after the monetary policy announcement by the Federal Reserve (Fed) on Wednesday, in which it reduced interest rates by 25 basis points (bps) to 4.00%-4.25%. The Fed signaled through its dot plot that Federal Funds Rate could decline to 3.6% by the year end.

Meanwhile, investors await speech from Fed Chair Jerome Powell, which is scheduled on Tuesday. Investors will look for cues about whether the Fed will continue reducing interest rates even as inflation is well above the central bank’s target of 2%.

In Japan, the Bank of Japan (BoJ) held interest rates steady at 0.5% on Friday and kept the door open for further monetary policy tightening. Meanwhile, Japan's Chief Cabinet Secretary and Prime Minister contender, Yoshimasa Hayashi, has supported BoJ’s hawkish view stating that the central bank is conducting the monetary policy in a way that does not deviate much from the government's thinking.