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USD/JPY weakens below 147.50 amid unabated concerns over Fed's independence
Thursday, 28 August 2025 06:24 WIB | USD/JPY |JAPAN

The USD/JPY pair loses ground to near 147.20 during the early Asian session on Thursday. The US Dollar (USD) weakens against the Japanese Yen (JPY) as worries persist over the Federal Reserve's (Fed) independence. Traders brace for the second estimate of US Q2 Gross Domestic Product (GDP) Growth Rate, followed by the weekly Initial Jobless Claims and Pending Home Sales reports.

The Greenback remains on the defensive due to US President Donald Trump's attempt on Monday to fire Fed Governor Lisa Cook. On Tuesday, Trump said that he will soon have a "majority" of his own nominees on the Fed board of governors who will back his desire to cut the interest rates. In response, Fed Governor Lisa Cook said Trump has no authority to fire her from the central bank, and she will not resign.

Trump's action to fire Cook is seen as an effort to exert control over the Fed and potentially influence monetary policy, raising concerns over the central bank's independence. Money markets are now pricing in nearly an 87.2% odds of a 25 basis points (bps) rate cut in September, according to the CME's FedWatch tool.

The second estimate of US Q2 GDP will be in the spotlight later on Thursday. The US economy is expected to grow at an annual rate of 3.1% in Q2. If the report shows a stronger-than-expected outcome, this could boost the Greenback in the near term.

On the other hand, recent comments from the Bank of Japan (BoJ) Governor Kazuo Ueda provide some support to the Japanese Yen. Ueda said that wage hikes are spreading beyond large firms and are likely to keep accelerating due to a tightening job market. His remarks boost market hopes of a further interest rate hike in the coming months.

Source: Fxstreet

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