USD/JPY exhibits strength near four-month high around 151.00 ahead of US NFP data

USD/JPY holds onto gains near a fresh four-month high around 151.00 as the US Dollar trades firmly.
Fed Powell signals no rush for interest rate cuts.
The BoJ kept the door open for more interest rate hikes.

Sagar Dua FXStreet

The USD/JPY pair trades firmly near a fresh four-month high around 151.00 during Friday’s European session posted earlier in the day. The pair exhibits strength as the US Dollar (USD) extends its upside, with traders trimming bets supporting interest rate cuts by the Federal Reserve (Fed) in the September policy meeting.

During European trading hours, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh two-month high near 100.20.

US Dollar PRICE Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.10%	0.34%	-0.20%	0.19%	0.12%	0.64%	0.42%
EUR	-0.10%		0.34%	-0.29%	0.16%	0.15%	0.40%	0.38%
GBP	-0.34%	-0.34%		-0.57%	-0.18%	-0.19%	0.26%	0.06%
JPY	0.20%	0.29%	0.57%		0.38%	0.33%	0.72%	0.62%
CAD	-0.19%	-0.16%	0.18%	-0.38%		-0.10%	0.45%	0.24%
AUD	-0.12%	-0.15%	0.19%	-0.33%	0.10%		0.46%	0.37%
NZD	-0.64%	-0.40%	-0.26%	-0.72%	-0.45%	-0.46%		-0.10%
CHF	-0.42%	-0.38%	-0.06%	-0.62%	-0.24%	-0.37%	0.10%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

According to the CME FedWatch tool, the probability for the Fed to cut interest rates in the September meeting has diminished to 39.2% from 58.4% seen a week ago.

Traders pare Fed dovish bets as Chairman Jerome Powell signaled no rush for interest rate cuts in his press conference on Wednesday, warning that “tariffs have started showing up in consumer prices”.

Additionally, upbeat Q2 Gross Domestic Product (GDP) and June’s hot Personal Consumption Expenditure Price Index inflation (PCE) data have also forced traders to trim interest rate cut bets.

Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for July, which will be published at 12:30 GMT.

Meanwhile, the Japanese Yen (JPY) gains ground as Bank of Japan (BoJ) Governor Kazuo Ueda has kept the door open for more interest rate hikes. “Will continue to raise policy rate if the economy, prices move in line with forecast, in accordance with improvements in economy, prices,” Ueda said in the press conference on Thursday.

Economic Indicator

Fed Interest Rate Decision

The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).

AUD/USD trims some losses, bounces back to 0.7150

AUD/USD has traded on the back foot on Monday, coming close to the 0.7100 mark before rebounding toward the 0.7150 region ahead of the opening bell in Asia. The Greenback’s solid performance has kept the risk complex under pressure, sending the Aussie to fresh monthly lows on the back of rising bets for a Fed rate hike this week. on Tuesday, investors are now expected to closely follow key data releases in China.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

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Gold picks up fresh upside traction and challenges the key $4,300 mark per troy ounce on Monday. The yellow metal, however, remain on the back foot on the back of marked gains in the US Dollar and rising US Treasury yields across the curve.

Bitcoin pushes past $79K as markets anticipate Fed meeting, Strategy stays put

Bitcoin rose above $79,000 on Monday as the broader crypto market enters a closely watched week for policymakers. According to QCP analysts, markets have largely priced in a 25-basis-point Federal Reserve rate increase after the release of August inflation data last week. The focus has shifted toward how policymakers communicate their outlook for future rate moves.

Eight reasons why the Fed should raise rates

The FOMC meeting on September 15–16 is expected to mark a turning point with the Fed’s first rate hike since May 2023. While there may have been economic reasons to hold off and maintain the status quo until now (some negative signals on the employment front and some encouraging ones on the inflation front), the conditions for a necessary recalibration now appear to be in place.

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