Japanese Yen surges to a seven-month high because of Fed rate hikes
The Japanese yen fell sharply on Thursday. The USD/JPY rate reached its highest in seven months. USD/JPY was trading at 141.24 during the European session. This represents an increase of 0.81 percent. Earlier in the day, the yen dropped to 141.50, its lowest level since November, as market participants reacted to the Federal Reserve’s hawkish stance.
BOJ to make a decision on future rate hikes, Federal Reserve hints at it
Jerome Powell has completely destroyed the expectations that there would be a Federal Reserve pause. Powell delivered a hawkish statement during the meeting on Wednesday. In the rate statement, it was stated that there would be more rate increases in the future. The upward revisions in growth and inflation estimates for the fourth quarter. Powell insisted that no decision has been made regarding the July meeting. However, the market already prices in a probability of 71% of a hike. This is because the market expects a continuation of rate tightening.
The focus now shifts to the Bank of Japan’s meeting on Friday. With the central bank’s ultra-loose monetary policy in place, the market expects the BOJ to maintain its key policy settings. The Bank may also comment on the yen’s depreciation,…