Last week’s FOMC meeting resulted in a 0.25% rate cut.
The dot chart, which was the focus of attention, suggested two more rate cuts before the end of the year, and in that sense, it was more dovish than the market assumed, but Chairman Powell remained hawkish in his press conference and stated that this rate cut was a “risk management rate cut.
Although he did not really want to cut interest rates, he stated that it would be better to do so in light of various factors, including pressure from the administration…. He exuded this perception.

Since the direction of the dot chart and the Chairman’s direction are completely opposite, the market was confused and the dollar plunged lower and was heavily bought back.
However, eventually a chairman will be appointed who will reflect President Trump’s views. Then someone like Stephen Milan will come in with three consecutive 0.5% rate cuts.
Will this time Chairman Powell’s resistance be the last?

The dollar rallied sharply, but the FOMC seemed to imply that it would sell off after position adjustments.

On Friday, the BOJ policy meeting was held and the policy rate was left unchanged at 0.5%, but there was a “surprise” as members Tamura and Takata insisted on a 0.25% rate hike.
The BOJ also decided to sell ETFs and REITs held by the Bank of Japan.
These factors caused the dollar/yen to temporarily fall to around 147.20 yen.

However, even if Commissioners Tamura and Takata insist on a rate hike, it remains unclear whether the BOJ will raise rates in the near term (October at the earliest).
Governor Ueda said that the impact of tariffs can be overcome, but that the uncertainty remains. In addition, ETFs will be sold, but at a little over 600 billion yen per year, a calculation that will take more than 100 years considering that the entire ETF holdings are over 70 trillion yen.
In other words, the impact will be negligible.

The impact will not be so great as to halt the trend of yen depreciation, but it will probably avoid a situation where the yen plummets for a while.
Range trading is likely to continue for some time yet.