Japanese Yen picks up within intervention levels with all eyes on the Fed
The Japanese Yen (JPY) nurses mild gains against the US Dollar (USD) on Wednesday, as the USD/JPY pair eases to 160.20, still above 160.00, considered the limit of tolerable JPY weakness for Japanese authorities. A moderate risk-on mood amid the US-Iran peace deal and caution ahead of the Federal Reserve’s (Fed) decision keep USD rallies subdued.
The Fed is widely expected to keep its monetary policy unchanged in Chairman Kevin Warsh’s first meeting. Investors will be attentive to Warsh’s press release to spot the differences with his predecessor, Jerome Powell, who maintained his position as a voter on the committee.
Markets will also have the bank's economic and interest rate projections to assess the near-term direction of the bank's monetary policy. Market rumours, however, suggest that Chairman Warsh might refrain from participating in the “Dot Plot.”
Meanwhile, hopes of a lasting peace in the Middle East are feeding a mild appetite for risk, adding pressure on the Greenback. US President Donald Trump affirmed on Tuesday that he expects to leave the war ”in the rearview mirror." Iranian officials, on the other hand, have vowed a “hard response” to Israel's attacks in Lebanon, keeping investors on their toes.
In Japan, data released on Wednesday has shown a narrower-than-expected trade deficit in May, as exports rose beyond expectations, while Machinery Orders posted another positive surprise. The impact on the Yen, however, was minimal. Earlier in the week, the Bank of Japan (BoJ) hiked interest rates to a 31-year high of 1%, still well below the rest of the major central banks, which is acting as a headwind for a significant Yen reversal.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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Exchange-Traded Funds, Equity Futures Higher Pre-Bell Tuesday Amid Lower Oil Prices
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