Yen tries to recover before Fed's decisions
The yen rose in Asian trade on Wednesday away from a one-week low against the US dollar, as investors shun new bullish positions on the dollar before the Federal Reserve’s policy decisions later today.
Following a cautious meeting by the Bank of Japan this week, the odds of a Japanese rate hike in July tanked with traders awaiting more data to gather additional clues.
The Price
The USD/JPY price fell 0.15% today to 145.04, with a week high at 145.44.
The yen lost 0.4% on Tuesday against the dollar, marking the third loss in a row amid mounting geopolitical tensions in the Middle East.
US Dollar
The dollar index fell over 0.15% on Wednesday away from a one-week high against a basket of major rivals.
It fell on profit-taking while investors shun new positions before the Fed’s policy decisions later today.
The Fed is widely expected to maintain rates unchanged at 4.5% for the fourth straight meeting, and will likely provide clues on the future path of monetary policies this year.
Japanese Rates
As expected, the Bank of Japan voted to hold interest rates unchanged at 0.5% at this week’s meeting, already the highest since 200.
The vote to maintain rates was unanimous by all nine members of the Bank of Japan’s governing board.
The BOJ didn’t enact any changes to its gradual reduction of government purchases, amounting to a 400 billion yen cut every quarter until March 2026.
Starting April 2026, the BOJ will cut its bond purchases by 200 billion yen a quarter, with an aim at reducing the bank’s government bond holdings by 16-17% by March 2027 compared to June 2024.
The BOJ asserted it’ll keep raising interest rates if inflation and economic outlook holds steady.
The bank warned against ongoing economic risks, especially the impact of global tariffs on the economy and inflation, with the bank standing ready to intervene in case long-term interest rates rose too quickly.
The current odds of a 0.25% BOJ interest rate hike in July fell to below 25%.
Now traders await fresh Japanese data on inflation, wages, and unemployment to gather more clues.
Brent expands gains to over 4% and passes the $76 barrier
Oil prices surged on Tuesday amid persistent concerns about the Iran-Israel tensions, and with Trump’s repeated threats against Tehran, with US crude expanding gains before inventory data.
Markets were concerned after US President Trump urged Iranians to evacuate Tehran on Tuesday, coinciding with his early leave from the G7 meeting in Canada.
Trump is now convening with his national security advisers to potentially discuss an intervention against Tehran on behalf of Israel.
Trump warned that his patience is running out, and urged Iran to completely withdraw from its nuclear program.
On trading, Brent August futures rose 4.4%, or $3.22 to $76.45 a barrel.
US July futures surged 4.28%, or $3.07 to $74.84 a barrel.
Ripple sharpens decline and marks a 6% loss
Most cryptocurrencies fell on Tuesday amid mounting geopolitical tensions in the Middle East, and with increasing odds of a US military intervention against Iran.
Recent data showed US retail sales fell 0.9% m/m to $715.4 billion in May, while analysts expected a 0.6% drop, as auto sales drop following Trump’s tariffs.
Later today, the Federal Reserve will convene and discuss policies, and will announce its decision tomorrow, widely expected to hold interest rates unchanged at below 4.5%.
Markets were concerned after US President Trump urged Iranians to evacuate Tehran on Tuesday, coinciding with his early leave from the G7 meeting in Canada.
Trump is now convening with his national security advisers to potentially discuss an intervention against Tehran on behalf of Israel.
Ripple
Ripple tumbled 5.8% on Coinmarketcap as of 20:35 GMT to $2.19.
US dollar rebounds before Fed's policy decision
The US dollar rose against most major rivals as traders assess latest geopolitical developments in the Middle East, and before the Fed’s policy decision.
Recent data showed US retail sales fell 0.9% m/m to $715.4 billion in May, while analysts expected a 0.6% drop, as auto sales drop following Trump’s tariffs.
Later today, the Federal Reserve will convene and discuss policies, and will announce its decision tomorrow, widely expected to hold interest rates unchanged at below 4.5%.
Markets were concerned after US President Trump urged Iranians to evacuate Tehran on Tuesday, coinciding with his early leave from the G7 meeting in Canada.
Otherwise, the dollar index rose 0.8% as of 19:49 GMT to 98.8, with a session-high at 98.8, and a low at 98.02.
Aussie
The Australian dollar fell 0.8% against its US counterpart as of 20:05 GMT to $0.6473.
Loonie
The Canadian dollar fell 0.5% against its US counterpart to 0.744.