The currency pair climbs 0.1% amid heightened US-Iran military aggression, lifting the US Dollar Index to near 101.00.
The USD/JPY pair advanced 0.1% to 163.60 in European trading on Thursday, supported by a rebound in the US Dollar (USD) amid escalating geopolitical risks. The US Dollar Index (DXY) rose 0.2% to near 101.00, recovering from Wednesday’s sharp decline.
The Federal Reserve held interest rates steady at 3.50%-3.75% on Wednesday but warned of persistent inflation risks. Three of 12 Fed officials dissented, favoring a 25-basis point hike. Fed Chair Kevin Warsh reiterated the central bank’s commitment to its 2% inflation target but provided little clarity on future policy moves.
Market sentiment remains cautious as analysts question the Fed’s ability to deliver on its inflation goals without clearer guidance. The USD’s strength against the Japanese Yen reflects broader risk sentiment driven by geopolitical developments.