USD/JPY clings to gains near 150.00 as focus shifts to Fed Powell’s speech

• USD/JPY holds onto gains near 150.00 ahead of Fed Powell’s speech.
• Investors anticipate support for ‘higher for longer’ interest rates from Fed Powell.
• Market watch for BoJ intervention as the Japanese Yen has dropped to almost 150.00 against the US Dollar.

The USD/JPY pair oscillates near the crucial resistance of 150.00 as investors watch for interest rate guidance from Federal Reserve (Fed) Chair Jerome Powell in his speech at the Economic Club of New York around 16:00 GMT.

Investors anticipate endorsement for keeping interest rates higher for a longer period to ensure progress in inflation declining toward the 2% goal from Jerome Powell. Also, Powell’s colleagues have been supporting for keeping interest rates unchanged in the 5.25-5.50% range as higher US Treasury yields are sufficient to impact spending and investment.

Meanwhile, S&P500 futures added nominal losses in the European session, portraying risk-off market sentiment. US equities were heavily sold on Wednesday amid caution as third quarter result season has kicked off. In addition to that, deepening Middle East conflicts have dented demand for risk-perceived assets. The US Dollar Index (DXY) consolidates around 106.60.

The Fed’s Beige Book released on Wednesday reported that economic activities remained almost unchanged in September. Loan demand declined modestly while credit quality remains healthy. Some heat was released from the tight labor demand as employers were hiring less urgently.

On the Japanese Yen front, investors watch for the Bank of Japan’s (BoJ) intervention in the FX domain as the Japanese Yen has dropped to almost 150.00 against the US Dollar. The intervention from BoJ or the authority may not be able to shift the tide, which is against the Japanese Yen as its weakness is backed by an expansionary monetary policy approach.