- The Japanese Yen (JPY) rises after 4-days of losses
- Safe haven demand remains
- The US Dollar (USD) rises against its major peers
- The Fed left rates and the dot plot unchanged
The US dollar against the Japanese yen (USD/JPY) exchange rate is falling after four days of gains. The pair rose 0.45% in the previous session, settling on Tuesday at 145.39. At 21:30 UTC, USD/JPY is 0.16% lower at 145.16 and in a range of 144.34 to 145.44.
The Japanese yen is rising against the US dollar amid ongoing tensions in the Middle East, keeping safe-haven demand alive. The Iran-Israel conflict has been going on for 6 days as President Trump held another meeting to discuss the Middle East conflict. He remains coy over whether the US will join Israel’s attack against Iran’s nuclear programme.
When asked if the US would be moving closer to bombing Iran, Trump responded, “I may do it. I may not do it.”
No Japanese data is due until Friday, when national inflation figures and the BoJ monetary policy meeting minutes will be released. The central bank left rates unchanged earlier in the week.
The US dollar is falling against the yen but rising against its major peers. The US dollar index, which measures the USD versus a basket of peers, is rising 0.11% to 98.90, adding to yesterday’s gains.
The U.S. dollar is rising after the Federal Reserve interest rate decision, which saw the US central bank leave rates unchanged for a fourth consecutive meeting.
The Federal Reserve downgraded its estimates for economic growth this year while raising its forecasts for unemployment and inflation. However, the Fed also said that uncertainty over the economic outlook had diminished, although it remained high.
The Fed’s dot plot continues to point to two rate cuts this year, unchanged from March, although a number of officials lowered their projections. Seven Fed officials now see no rate cuts this year compared to four in March. The dot plot also pointed to a wider divide among policymakers over the direction of rates. The market is now pricing in a 74% probability the Fed will cut rates by September, compared to 66% before the meeting.
