One US Official's Comment Causes USD/JPY to Plunge
The US dollar weakened, pushing USD/JPY down to around 146.45 during the Asian session, as markets became increasingly confident that the Federal Reserve would cut interest rates in September. The probability of a cut even increased after moderate US inflation in July, while some participants began discussing the option of a 50 bps rate cut. The broad dollar's weakness added support to the yen's strength.
Sentiment toward the yen also received a boost from comments by US Treasury Secretary Scott Bessent, who said the Bank of Japan was "lagging the curve" and would eventually need to raise interest rates. This statement added to expectations of a narrowing of the US-Japan interest rate differential going forward, a structurally positive factor for the JPY.
Looking ahead, traders will be monitoring the Fed and BoJ policy signals along with upcoming US data for direction. In terms of levels, the immediate market focus is on the 146.00 area as a psychological support; a break below it opens up room for a move towards 145.80–145.40. On the upside, 147.60–148.40 zone becomes the initial hurdle that needs to be broken to ease the intraday downside pressure.
Source: Newsmaker.id
