USD/JPY Stable at 160, Markets Await BoJ and Fed
USD/JPY moved flat around 160.20 during the Asian session on Monday (June 15), after the US dollar weakened slightly against the yen following news that the United States and Iran had agreed to a peace framework. The agreement is said to take effect on Friday and includes an end to the US blockade of Iran and the reopening of the Strait of Hormuz.
The sentiment of a US-Iran peace agreement provided limited support for the yen by dampening demand for the dollar as a safe-haven asset. However, the market remained cautious as President Donald Trump warned that the US could strike Iran again if a final nuclear deal was not reached. This condition prevented USD/JPY from emerging from its consolidation area.
The main focus this week will be the interest rate decisions of the Bank of Japan and the Federal Reserve. The Fed is expected to keep rates unchanged at its meeting on Wednesday, while the market will closely monitor the policy direction under new Chairman Kevin Warsh. In Japan, the BoJ is expected to raise interest rates to 1.0% on Tuesday, the highest level since 1995.
With the BoJ's rate hike almost fully priced in, attention shifts to the next guidance. If the BoJ signals a further rate hike towards 1.25% in the fourth quarter, the yen could receive additional support. However, as long as the US-Japan yield spread remains wide and USD/JPY remains near 160, the risk of Japanese intervention remains a limiting factor. (asd)
Source: Newsmaker.id
