- USD/JPY hits a new weekly high at 149.96 before retreating 0.13% to trade at 149.75.
- Fed Chair Jerome Powell’s dovish comments led to a decline in expectations for further tightening by the Fed.
- The odds of a rate hike in January 2024 dropped from 50% to 40% following Powell’s comments.
USD/JPY turns negative after hitting a new weekly high at 149.96, but retreats 0.13% following dovish comments from US Federal Reserve (Fed) Chair Jerome Powell amid momentum risk appetite, as seen in Wall Street earnings. Therefore, the pair is trading at 149.75 at the time of writing.
USD/JPY turns negative after Jerome Powell’s dovish words
Jerome Powell’s words moved markets, while expectations of further tightening by the Fed moderated, as the odds of a rate hike in January 2024 fell from 50% on Wednesday to 40% after Fed Powell’s comments.
Fed Chair Jerome Powell commented that the committee would proceed “carefully” in setting monetary policy, as evidence of above-trend growth would justify further tightening of monetary policy. He added that the policy is restrictive and acknowledged that inflation remains too high. He claimed that the labor market is too tight and that markets have gotten ahead of policy changes by U.S. central banks.
In terms of data, the US agenda revealed the tightness of the labor market after last week’s jobless claims stood at 198,000, below forecasts and previous figures, at 212,000 and 211,000, respectively. Simultaneously, the Philadelphia Fed’s manufacturing index showed that business conditions in the region are crumbling, sparking fears of a possible economic recession.
On the Japanese front, exports hit a record in September, rising for the first time in three months, as car factories increased shipments to the US and Europe. Export estimates were 3.1%, but the numbers increased by 4.3%. Meanwhile, Japan’s top diplomat, Masato Kanda, said there is an “international agreement” whereby authorities could intervene in currency markets if excessive movements occur.
USD/JPY technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
