USD/JPY: Bulls print fresh six-year high at 119.10 on Fed’s interest rate hike

• USD/JPY has printed a fresh six-year high at 119.10.
• Seven out of eight Fed members favored a 25 bps interest rate hike.
• The Fed announced seven interest rate hikes for 2022.

The USD/JPY pair has recorded a fresh six-year high at 119.12 after the Federal Reserve (Fed) pushed their interest rates higher by 25 basis points (bps). The decision was very much on cards as the Fed was left with no other option than to feature a rate hike to contain the soaring inflation.

Considering the ongoing Russia-Ukraine war and eventually fear of stagflation, seven out of eight Fed’s monetary policy committee (MPC) members raised their palms in favor of a gradual interest rate elevation. The Fed has announced seven interest rate hikes this year.  It seems that the greenback is underpinned against the Japanese yen on the announcement of seven interest rate hikes in 2022 as a 25 bps rate hike was already announced by Fed Chair Jerome Powell in his March testimony. Also, an aggressive hawkish stance for the remaining monetary policies of 2022 was expected by the street but seven rate hikes in 2022 are far from the expectation.

Meanwhile, the US dollar index (DXY) is hovering around 98.50, awaits fresh impetus from the Russia-Ukraine war. The 10-year US Treasury yields have climbed near 2.19% post the aggressive tightening stance from the Fed.

Now investors will focus on peace talks between Russia and Ukraine. The nations are inching towards a ceasefire but the market participants await more clarity. Apart from that, the Bank of Japan (BOJ) will announce its interest rate decision on Friday. The BOJ is likely to maintain the status quo by keeping the interest rates unchanged at 0.1%.