USD/JPY holds gains near 154.00 ahead of the Fed’s minutes 

Finance

USD/JPY holds gains near 154.00 ahead of the Feds minutes

The US Dollar (USD) maintains a moderately positive tone against the Japanese Yen (JPY) this week, with price action hovering at the upper range of the 153.00s. The pair, however, remains trapped within the weekly range, with resistance around 154.00 holding bulls ahead of the release of the minutes of the US Federal Reserves (Fed) latest meeting.

The Fed left its benchmark interest rates on hold at the 3.5-3.75% range and hinted at a steady monetary policy in the near-term. The minutes of the meeting are likely to highlight the divergences within the banks committee, which will be observed with particular interest, following cooler US inflation and weak US employment reports released last week.

On Tuesday, Chicago Fed President Aistan Goolsbee highlighted those divergences, stating that, if price pressures continue moderating, the bank might cut interest rates several times this year.

In Japan, the weak Q4 Gross Domestic Product (GDP) figures released on Monday have resurfaced concerns about Japan‘s economic outlook, endorsing Prime Minister Sanae Takaichi’s plans for large-scale economic stimulus and lower taxes.

The International Monetary Fund (IMF) has warned about the negative fiscal consequences of cutting the consumption tax and has called for further monetary tightening by the Bank of Japan to keep inflation anchored. This scenario has eased the JPYs bullish momentum observed last week, and is giving some oxygen to a hitherto battered US Dollar.