USD/JPY surges to near two-year high after Fed’s decision to deliver a hawkish hold

The Fed opted to hold interest rates, as expected, in Chair Powell's last meeting as chair.
US President Trump discussed continuing the blockade on the Strait of Hormuz until Iran agrees to a nuclear deal.
Japanese Retail Trade, CPI, and the BoJ minutes will be released throughout the week.

Agustin Wazne FXStreet

The USD/JPY is trading near the 160.20 price region, near a two-year high, after the Federal Reserve (Fed) decided to hold interest rates as widely anticipated, marking the last meeting chaired by Jerome Powell.

While the Fed decided to keep rates unchanged as markets expected, the statement showed some hawkish comments, emphasizing that inflation is "elevated." Traders now turn their attention to Chair Jerome Powell's press conference.

Earlier in the day, the United States (US) President Donald Trump's nominee to become the Fed’s Chair, Kevin Warsh, was confirmed by the US Senate Banking Committee. The vote was split 13-11, with Republicans holding the edge over Democrats, passing the first round of voting. Warsh has not been formally elected yet, as he needs to be confirmed by the full Senate before replacing Powell on May 15.

Earlier in the day, White House Officials claimed that President Trump has been discussing with Oil companies to continue the blockade in the Strait of Hormuz until Iran agrees to a nuclear deal. This news helped push the Greenback up the hill, as it did wth Oil.

Looking at the economic calendar, the Japanese Retail Trade will be released later today. Also, the Tokyo Consumer Price Index (CPI) is scheduled for release on Thursday. On Friday, the Bank of Japan (BoJ) monetary policy minutes.

The pair is sitting near levels at which the Japanese Government has previously intervened verbally.

Short-term technical analysis:

On the four-hour chart, USD/JPY trades at 160.26. The pair maintains a bullish near-term bias as it holds above both the 20-period and 100-period Simple Moving Averages (SMAs) at 159.53 and 159.22, respectively, while recapturing prior horizontal levels now acting as support around 160.17. The Relative Strength Index (14) hovers near 67, suggesting firm upside momentum and hinting that bulls remain in control, even as the pair edges toward near-term overbought territory.

On the topside, immediate resistance emerges at 160.32, with a subsequent barrier at 160.36, where a break higher would open the way to further gains. On the downside, initial support is seen at 160.17, followed by 159.82, with the 20-period SMA at 159.53 and the 100-period SMA at 159.22 reinforcing a broader demand band on pullbacks.

(The technical analysis of this story was written with the help of an AI tool.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

AUD/USD shows resilience below 38.2% Fibo. near mid-0.7100s

The AUD/USD pair touches a one-and-a-half-week low, around the 0.7140 region during the Asian session on Monday, though it lacks follow-through. Spot prices currently trade just above mid-0.7100s, down nearly 0.25% for the day.

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.

Gold: Fed’s rate decision to drive the next move

Gold reflects a subdued performance at the start of the Federal Reserve’s (Fed) monetary policy week at around $4,330. Fed’s interest rate expectations heavily influenced last week after the release of the hot United States (US) Producer Price Index (PPI) and Consumer Price Index (CPI) reports for August.

Pi Network extends gains as ecosystem development supports recovery

Pi Network (PI) extends its recovery on Monday, trading above $0.097 after two consecutive weeks of gains. Continued ecosystem development and improved developer tools are boosting utility. Meanwhile, the technical indicators point to a tentative recovery, but overhead Exponential Moving Averages remain a challenge and cap PI gains.

Canada CPI expected to show steady inflation in August

Canada’s August Consumer Price Index figures will be the focus of attention when published on Monday. Indeed, Statistics Canada data will provide markets with an update on price pressures following the Bank of Canada’s September 2 meeting, when officials kept the interest rate steady at 2.25%, broadly in line with analyst consensus.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.