Japanese Yen weakens as Fed hold reveals hawkish divide

The Japanese Yen (JPY) loses ground against the US Dollar (USD) after the Federal Reserve (Fed) kept rates steady on Wednesday, even though US inflation remains well above its 2% target. Of note, the decision was not unanimous, with two dissenters in favor of a quarter-percentage-point rate hike. USD/JPY trades at 158.28, up 0.21%.

USD/JPY climbs toward 158.50 as two Fed officials dissent against holding rates amid persistent inflation

On Wednesday, the Fed held rates at 3.75%-4% and acknowledged that economic activity is expanding, that domestic spending “has been resilient, that productivity growth is strong and that capital investment is robust,” and that productivity growth is strong. Regarding its employment mandate, the Fed noted that “Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

On inflation, the central bank said it remains elevated but chose to hold off on rate hikes while gathering more information and assessing the appropriate policy stance.

The FOMC’s two dissenters were Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack.

USD/JPY Price Chart – Daily