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Yen firms as Fed hold seen hawkish for USD outlook

The Fed kept the policy rate in the 3.50%–3.75% range, but a 9–3 vote and three hawkish dissents supported expectations for higher-for-longer rates.

Reported · Written up by our desk · Major Pairs

The Japanese yen strengthened versus the US dollar after the Federal Reserve left its policy rate unchanged, though the Fed’s decision carried a broadly hawkish tone that helped the dollar recover losses seen immediately after the announcement, according to FXStreet.

USD/JPY traded near 163.60 in midweek, rebounding from its post-Fed dip as investors digested the central bank’s messaging. While the Federal Open Market Committee held the fed funds rate in the 3.50% to 3.75% range as expected, the decision passed 9–3, with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan favoring a 25 basis point increase.

FXStreet also noted the Fed’s communications emphasized that economic activity is expanding at a solid pace, unemployment has changed little, and inflation remains elevated versus the 2% goal. The statement pointed to persistent inflation concerns, citing uncertainty linked in part to the conflict in the Middle East, as well as supply shocks including higher energy costs.

Beyond the policy rhetoric, FXStreet cited technical levels for USD/JPY, including resistance near 163.63, 163.70 and 163.90, and support around 163.45, with the 100-period simple moving average near 162.75 serving as a deeper floor if the pair breaks lower.

Latest closeUSD/JPY 163.85 ▲0.1%

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