The Fed’s interest rate decision was released, and the USD/JPY exchange rate remained in a range of fluctuations
2025-06-19 13:39:43
The Fed maintains interest rates but sends hawkish signals, and the dollar is supported
The Fed kept interest rates unchanged at its June meeting as expected, but the dot plot showed that seven of the 19 policymakers preferred not to cut interest rates throughout the year. The committee still expects two rate cuts by the end of 2025, but also hinted that inflation may remain at 3% by the end of the year. This "hawkish standstill" stance pushed the dollar to a one-week high, supporting USD/JPY to stabilize above the psychological level of 145.00.
Yen constrained by cooling rate hike expectations and trade uncertainty
Although tensions in the Middle East have increased safe-haven demand, market expectations for further rate hikes by the Bank of Japan in 2025 have clearly weakened, leaving the yen without strong momentum for appreciation. The United States still maintains a 25% tariff on Japanese cars, and Japan has not yet reached an agreement with the United States on retaliatory measures, leaving uncertainty in trade negotiations before July 9.
"The market remains skeptical about the Bank of Japan's interest rate hike prospects this year. Although geopolitical risk aversion provides short-term support, it lacks long-term upward momentum." - Market Observer Comment
The conflict in the Middle East is brewing, and the safe-haven demand for the yen is supported
Iran's Supreme Leader Khamenei responded strongly, saying he would "not compromise" and that any U.S. intervention would cause "irreparable damage." The market is worried that the conflict in the Middle East may expand, and the U.S.-Iran struggle may once again drive safe-haven assets into the yen.
The current USD/JPY exchange rate is running in the range of 144.50 to 145.45. The technical indicators of the daily chart are beginning to move upward, with the MACD golden cross emerging and the RSI gradually approaching the 60 level, indicating that the bulls are gradually strengthening.
Upside resistance: 145.45 is the high point of this month and the top of the range. If it holds above it, it is expected to touch the 146.00 mark and further challenge the 146.25-146.30 area (May 29 high).
Downside support: If the initial support of 144.50-144.45 is broken, the exchange rate may test the 144.00 mark. Further support is in the 143.55-143.50 area. If it is lost again, it will point to the 142.75 line (last Friday's low).
Editor's opinion:
The current trend of USD/JPY is driven by both macro fundamentals and geopolitical risks. The Fed's hawkish attitude has kept the USD strong, while the decline in the Bank of Japan's interest rate hike expectations has suppressed the JPY.
Geopolitical risks support risk aversion in the short term, but fail to change the medium-term weakening trend of the yen. If the situation in the Middle East escalates and the Fed really keeps high interest rates unchanged this year as the dot plot suggests, USD/JPY may break through the 146 mark.
The Fed kept interest rates unchanged at its June meeting as expected, but the dot plot showed that seven of the 19 policymakers preferred not to cut interest rates throughout the year. The committee still expects two rate cuts by the end of 2025, but also hinted that inflation may remain at 3% by the end of the year. This "hawkish standstill" stance pushed the dollar to a one-week high, supporting USD/JPY to stabilize above the psychological level of 145.00.
Yen constrained by cooling rate hike expectations and trade uncertainty
Although tensions in the Middle East have increased safe-haven demand, market expectations for further rate hikes by the Bank of Japan in 2025 have clearly weakened, leaving the yen without strong momentum for appreciation. The United States still maintains a 25% tariff on Japanese cars, and Japan has not yet reached an agreement with the United States on retaliatory measures, leaving uncertainty in trade negotiations before July 9.
"The market remains skeptical about the Bank of Japan's interest rate hike prospects this year. Although geopolitical risk aversion provides short-term support, it lacks long-term upward momentum." - Market Observer Comment
The conflict in the Middle East is brewing, and the safe-haven demand for the yen is supported
Iran's Supreme Leader Khamenei responded strongly, saying he would "not compromise" and that any U.S. intervention would cause "irreparable damage." The market is worried that the conflict in the Middle East may expand, and the U.S.-Iran struggle may once again drive safe-haven assets into the yen.
The current USD/JPY exchange rate is running in the range of 144.50 to 145.45. The technical indicators of the daily chart are beginning to move upward, with the MACD golden cross emerging and the RSI gradually approaching the 60 level, indicating that the bulls are gradually strengthening.
Upside resistance: 145.45 is the high point of this month and the top of the range. If it holds above it, it is expected to touch the 146.00 mark and further challenge the 146.25-146.30 area (May 29 high).
Downside support: If the initial support of 144.50-144.45 is broken, the exchange rate may test the 144.00 mark. Further support is in the 143.55-143.50 area. If it is lost again, it will point to the 142.75 line (last Friday's low).
Editor's opinion:
The current trend of USD/JPY is driven by both macro fundamentals and geopolitical risks. The Fed's hawkish attitude has kept the USD strong, while the decline in the Bank of Japan's interest rate hike expectations has suppressed the JPY.
Geopolitical risks support risk aversion in the short term, but fail to change the medium-term weakening trend of the yen. If the situation in the Middle East escalates and the Fed really keeps high interest rates unchanged this year as the dot plot suggests, USD/JPY may break through the 146 mark.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
