USD/JPY is eying 150.00 on hawkish Fed, dovish BoJ

The USD/JPY pair is moving towards 150.00, with Japanese intervention warnings looming. The central bank in Japan is still dovish, with the risk of raising rates being heavily skewed to the upside.

The USD/JPY pair is up 0.27%, trading at about 149.40s. The surge is halted by threats of intervention due to differences in monetary policy. Expectations of more tightening by the US Federal Reserve continue to shape the financial markets.

The latest Durable Goods Orders surpassing projections are providing the dollar a boost, which would likely continue to record gains across the board. Durable goods were forecasted to decline by 0.5% in August but instead increased by 0.2%, exceeding the decline of -5.6% in July.

Fed’s Neil Kashkari noted uncertainty but potential for rising interest rates in a CNN interview. The Bank of Japan’s minutes from its July meeting revealed that the YCC changes are not a sign that the supportive stance is ending, and they are uncertain about whether inflation will be sustained beyond the 2% objective.

A rate increase for December and January has started to be priced in the swaps market, with odds of 70% for the former and 60% for the latter.