The USD/JPY pair gives up entire intraday gains after facing selling pressure around 149.60 and drops to near 148.60 during North American trading hours on Friday. The asset drops as the US Dollar (USD) gains, with the US Dollar Index (DXY) rising to near 104.00.

The Greenback attracts bids as the Federal Reserve (Fed) is unlikely to cut interest rates in the near term. On Wednesday, Fed Chair Jerome Powell stated that they are not in a hurry to cut interest rates amid "unusually elevated" uncertainty over the United States (US) economic outlook under the leadership of President Donald Trump. Powell also warned that Trump's tariff policy tends to push growth lower and inflation higher.
The USD/JPY pair gives up entire intraday gains after facing selling pressure around 149.60 and drops to near 148.60 during North American trading hours on Friday. The asset drops as the US Dollar (USD) gains, with the US Dollar Index (DXY) rising to near 104.00.

The Greenback attracts bids as the Federal Reserve (Fed) is unlikely to cut interest rates in the near term. On Wednesday, Fed Chair Jerome Powell stated that they are not in a hurry to cut interest rates amid "unusually elevated" uncertainty over the United States (US) economic outlook under the leadership of President Donald Trump. Powell also warned that Trump's tariff policy tends to push growth lower and inflation higher.

Over the last decade, the BoJ's stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

Source: Fxstreet