Traders await the Fed’s updated economic projections and dot plot after the BoJ’s rate hike failed to lift the yen significantly.
The USD/JPY pair trades below 160.50 in Asian hours, remaining near multi-decade highs despite the Bank of Japan’s rate increase to its highest level since 1995. The yen’s struggles persist as Japan’s borrowing costs lag behind those of the U.S., sustaining carry trade demand.
Markets expect the Federal Reserve to hold rates steady and remove its easing bias, with attention shifting to the dot plot and updated economic forecasts. Fed Chair Jerome Powell’s remarks will be closely watched for clues on future policy moves, which could sway the dollar and the yen pair.
Optimism over a U.S.-Iran peace deal and speculation of potential Japanese intervention have tempered further upside in USD/JPY. However, the yen’s lack of momentum reflects broader concerns about Japan’s monetary policy divergence with the U.S.