Hawkish Fed expectations drive USD/JPY surge
According to ChainCatcher, citing Golden Ten Data, after the Federal Reserve's rate cut, the US dollar weakened across the board. The Japanese yen once rose, but ultimately the USD/JPY exchange rate erased all losses and surged. The FOMC dot plot shows that two more rate cuts are expected in 2025, while the market expects three. Federal Reserve Chairman Powell described the rate cut as a "risk management" action, and future data will be key. Strong data may trigger a hawkish shift in rate expectations, supporting the dollar, while weak data may continue to put pressure on it. The rise in the yen was mainly driven by market expectations of a dovish Federal Reserve.
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