The USD/JPY increased by 0.63% on Tuesday when Jerome Powell testified before Congress. The mood got worse after US stocks went up. Powell shook the pig up and down on the stand. The USD/JPY trades at 136.87.
Powell said in a speech that the Fed might have to raise interest rates more quickly than expected. “The most recent economic data are better than expected, which suggests that interest rates will probably be higher in the end,” he said.
Powell said again that, even though inflation is going down, “the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.”
The US Dollar Index (DXY) is up 0.84% at 105.161. At the same time, the yield on US 10-year Treasury bonds went above 4%, which hurt the USD/JPY.
After going around 136.20, Powell’s speech pushed the USD/JPY to a high for the day of 136.90.
At its last meeting with Governor Haruhiko Kuroda this week, Japan’s central bank will keep its easy money policy. In January, real wages in Japan fell the most in nine years because inflation was the highest in four decades.
Trade Idea
Even though the trend is neutrally up, the pair could soon reach 137.00.