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USD/JPY soars to 3-month high as Powell dials down September cut bets
Thursday, 31 July 2025 05:13 WIB | USD/JPY |JAPAN

The USD/JPY rallies over 0.60% after the Federal Reserve held interest rates unchanged and as Fed Chair Jerome Powell, turned slightly hawkish and muted for a September rate cut. The pair trades at 149.38, refreshing three-month highs.

During his post-meeting press conference, Federal Reserve Chair Jerome Powell stated that they have no made any decisions regarding the September meeting. He said that policy is moderately restrictive and that it will take time to fully understand the effects of newly imposed tariffs, noting, "Tariff passthrough to prices may be slower than thought." He added that the Fed expects to see more tariff-related impacts reflected in upcoming economic data.

The Fed's monetary policy statement acknowledged that economic activity moderated during the first half of the year, while the unemployment rate remains low and inflation is "somewhat elevated." Policymakers reaffirmed their dual mandate of achieving maximum employment and returning inflation to the 2% target, while emphasizing that "uncertainty about the economic outlook remains elevated."

The central bank also confirmed it will continue reducing its balance sheet, including holdings of Treasury securities, agency debt, and mortgage-backed securities.

source: Fxstreet

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