USD/JPY rises 0.2% to around 156.60 during late Asian trading on Wednesday, supported by a stronger US Dollar following the release of the Federal Open Market Committee (FOMC) minutes from December’s policy meeting. The US Dollar Index (DXY), tracking the Greenback against six major currencies, hits near 98.30, marking a weekly high.
FOMC signals potential for further easing
FOMC minutes revealed that officials highlighted the need for additional interest rate cuts, citing risks in the US labor market. “Most participants noted moving toward a more neutral policy stance would help forestall possible job market deterioration,” the minutes said.
Despite reducing rates by 75 basis points to 3.50%-3.75% in 2025, Fed policymakers have argued in favor of further monetary easing. According to the CME FedWatch tool, markets are pricing in at least a 50-bps rate cut in 2026.
Yen under pressure amid doubts over BoJ tightening
The Japanese Yen faces selling pressure as traders question whether the Bank of Japan (BoJ) will tighten monetary policy soon, especially with government support for higher fiscal spending to stimulate growth. BoJ officials have indicated the possibility of more interest rate cuts as corporate behavior around pay and wage growth evolves.
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