USD/JPY approaches 145.00 as US Dollar refreshes three-day high ahead of Powell commentary

• USD/JPY is approaching 145.00 amid sheer strength in the USD Index.
• S&P500 futures have posted nominal losses ahead of opening as investors are cautious about Powell’s speech.
• A survey from Reuters showed that the BoJ could intervene in FX moves if the Japanese Yen depreciates to 145.00 against the US Dollar.

The USD/JPY is rising swiftly towards the crucial resistance of 145.00 in the early New York session. The asset has been fueled with immense strength as the US Dollar Index (DXY) has printed a fresh three-day high at 102.90.

S&P500 futures have posted nominal losses ahead of opening as investors are cautious about the speech from Federal Reserve (Fed) chair Jerome Powell at the European Central Bank (ECB) forum of Central Banking. Market mood has turned risk-averse as investors are hoping that Fed Powell would continue reiterating a hawkish stance.

The US Dollar Index has jumped strongly supported by expectations of hawkish guidance from Fed Powell and firmer US Durable Goods Orders data. US Census Bureau reported that Durable Goods Orders have expanded by 1.7% while the street was anticipating a contraction of 1%. May’s Durables data has outperformed April’s figure of 1.2%.

A hawkish guidance is expected from Jerome Powell as core inflation in the United States economy is showing persistent and labor market conditions are still tight despite higher interest rates and tight credit conditions by commercial and regional banks.

Meanwhile, a survey from Reuters showed that the Bank of Japan (BoJ) could intervene in FX moves if the Japanese Yen depreciates to 145.00 against the US Dollar. Japanese Finance Minister Shunichi Suzuki reiterated on Wednesday that he “will respond appropriately to excessive FX moves if necessary.”

Later this week, Tokyo’s Consumer Price Index (CPI) data will be keenly watched. Headline CPI is seen accelerating to 3.8% while core inflation could jump to 4.4%.