USD/JPY Strength Fizzles as Fed Chairman Powell Softens Hawkish Tone

Japanese Yen Talking Points

USD/JPY quickly pulls back from a fresh weekly-high (114.04) as Federal Reserve Chairman Jerome Powellwarns that the benchmark interest rate is ‘just below the broad range of estimates of the level that would be neutral for the economy,’ and the exchange rate may continue to consolidate over the remainder of the month as it marks another failed attempt to test the 2018-high (114.55).

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USD/JPY Strength Fizzles as Fed Chairman Powell Softens Hawkish Tone

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Chairman Powell appears to be adopting a less-hawkish tone ahead of 2019 as ‘sustained declines in equity prices can put downward pressure on spending and confidence,’ and the comments infer that the Federal Open Market Committee (FOMC) is nearing the end of the hiking-cycle as the central bank head notes that ‘the economic effects of our gradual rate increases are uncertain.’

With that said, updates to the core Personal Consumption Expenditure (PCE) may also produce headwinds for the U.S. dollar as the Fed’s preferred gauge for inflation is expected to narrow to 1.9% from 2.0% per annum in September, and signs of limited

Article source: https://www.dailyfx.com/forex/fundamental/us_dollar_index/daily_dollar/2018/11/28/USDJPY-Strength-Fizzles-as-Fed-Chairman-Powell-Softens-Hawkish-Tone.html