- USD/JPY taking on bear's commitments, in a clearout ahead of the Fed?
- Fed to communicate is a potential change of policy is a long way off.
USD/JPY is currently trading at 108.91 between a range of 108.62 and 108.91 and climbing some 0.2% on the session as the dollar pulls some punches ahead of the Federal Reserve's interest rate decision later today.
Overnight, USD/JPY rose from 108.10 to 108.75 while the yen was sold off by the Bank of Japan’s downgraded inflation forecast.
Meanwhile, the US dollar was mixed versus the G10 on the day and US treasury yields climbed despite improved demand in the seven-year auction.
Traders were positioning for the outcome of the two-day Federal Open Market Committee meeting on Wednesday which left the 2-year government bond yields climbing to 0.18% and the 10-year government bond yields increasing to 1.62%.
Westpac's outlook for the FOMC
''The FOMC meeting statement is unlikely to change materially in April from March given that the recovery and risks are broadly as they were,'' analysts at Westpac argued.
''Market participants will focus instead on the post-meeting press conference of Chair Powell, in particular, his view of the progress necessary for a tapering of asset purchases to be considered'' they explained.
Finally, the analysts say that they ''continue to believe communicating a potential change of policy is a long way off, let alone acting on it, with the FOMC keen to maximise the return from this recovery, and, ''given the US's current momentum; the path of policy; and remaining risks, the taper is most likely to occur in the second half of 2022, with federal fund rate hikes to come well after that.''
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
AUD/USD gains ground on hawkish RBA, Nonfarm Payrolls awaited
The Australian Dollar continues its winning streak for the third successive session on Friday. The hawkish sentiment surrounding the Reserve Bank of Australia bolsters the strength of the Aussie Dollar, consequently, underpinning the AUD/USD pair.
USD/JPY: Japanese Yen advances to nearly three-week high against USD ahead of US NFP
The Japanese Yen continues to draw support from speculated government intervention. The post-FOMC USD selling turns out to be another factor weighing on the USD/JPY pair. Investors now look forward to the crucial US NFP report for a fresh directional impetus.
Gold lacks firm near-term direction, remains stuck in a range ahead of US NFP
Gold price struggles to gain any meaningful traction amid mixed fundamental cues. The Fed’s less hawkish outlook drags the USD to a multi-week low and lends support. Bets for a delayed Fed rate cut and a positive risk tone cap gains ahead of the US NFP.
Solana price pumps 7% as SOL-based POPCAT hits new ATH
Solana price is the biggest gainer among the crypto top 10, with nearly 10% in gains. The surge is ascribed to the growing popularity of projects launched atop the SOL blockchain, which have overtime posted remarkable success.
NFP: The ultimate litmus test for doves vs. hawks
US Nonfarm Payrolls will undoubtedly be the focal point of upcoming data releases. The estimated figure stands at 241k, notably lower than the robust 303k reported in the previous release and below all other readings recorded this year.