USD/JPY dips as markets eye Fed, BoJ meetings amid rising inflation risks

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USD/JPY declines on Monday, trading around 159.20 at the time of writing, down 0.33% on the day as the Japanese Yen (JPY) gains modest ground ahead of a crucial week for global central banks, with policy decisions from the Federal Reserve (Fed) and the Bank of Japan (BoJ) scheduled for Wednesday and

USD/JPY dips at the start of the week as markets await the Fed and BoJ policy meetings.
Rising Oil prices linked to the Middle East war are fuelling inflation concerns and complicating Japan’s economic outlook.
Japanese authorities step up warnings against excessive currency moves, raising intervention risks.

Markets broadly expect the Fed to keep interest rates unchanged within the current 3.50%-3.75% range on Wednesday. The recent surge in Oil prices, driven by geopolitical tensions in the Middle East and disruptions around the Strait of Hormuz, is adding to inflation concerns in the United States (US) and encouraging policymakers to maintain a cautious stance. According to the CME FedWatch tool, investors do not expect a rate cut before the October meeting.

Against this backdrop, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, falls below the 100 level after reaching a more than nine-month high of 100.54 on Friday.

Attention then turns to the Bank of Japan (BoJ), which is widely expected to keep its policy rate unchanged at 0.75% on Thursday while maintaining the option of further tightening if inflation remains persistent. Investors will closely watch comments from BoJ Governor Kazuo Ueda for clues on how higher energy prices could influence inflation dynamics and economic growth in Japan.

The surge in Oil prices presents a challenge for the Japanese economy, which relies heavily on imported energy. Earlier on Monday, Japan announced it had begun releasing Oil from its strategic reserves to help meet domestic energy demand amid concerns about potential supply disruptions.

Meanwhile, the Japanese Yen is also drawing support from renewed warnings by authorities regarding excessive currency moves. Finance Minister Satsuki Katayama stated that the government is closely monitoring developments in the foreign exchange market and stands ready to take action if necessary. Over the weekend, Japan and South Korea issued a rare joint statement expressing serious concern about the rapid depreciation of both the Japanese Yen and the South Korean Won (KRW).

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.72%	-0.67%	-0.33%	-0.30%	-1.10%	-1.37%	-0.49%
EUR	0.72%		0.14%	0.40%	0.43%	-0.37%	-0.52%	0.24%
GBP	0.67%	-0.14%		0.34%	0.29%	-0.51%	-0.70%	0.14%
JPY	0.33%	-0.40%	-0.34%		0.04%	-0.77%	-0.87%	-0.16%
CAD	0.30%	-0.43%	-0.29%	-0.04%		-0.79%	-0.98%	-0.15%
AUD	1.10%	0.37%	0.51%	0.77%	0.79%		-0.18%	0.73%
NZD	1.37%	0.52%	0.70%	0.87%	0.98%	0.18%		0.83%
CHF	0.49%	-0.24%	-0.14%	0.16%	0.15%	-0.73%	-0.83%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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