USD/JPY: Dollar Sells Off to ¥148.00 After Powell Reaffirms Rate Cuts Are Coming This Year

Powell said central bank is still on track to lower interest rates this year. And markets figured he must be talking about June.

Key Points:

• Dollar dropped sharply against yen.
• Powell moved to reassure investors.
• Markets expect lower rates in June.
• The USDJPY pair sold off early Thursday with the greenback retreating under the ¥148.00 milestone for the first time since the start of February. FX markets offloaded their dollar bags after Federal Reserve chief Jerome Powell assuaged investor concerns over this year’s rate-cut timeline.
• “We’re not looking for better inflation readings than we’ve had. We’re just looking for more of them,” the central banker told the House Financial Services Committee on Wednesday in his two-day appearance on Capitol Hill. Today, Powell is speaking again, this time to the US Senate Committee on Banking, Housing, and Urban Affairs.
• Traders are still confident that the first rate trim could come as soon as June. With that in mind, the US dollar extended its EURUSD crossed $1.09, logging a six-week high, and the GBPUSD is on track to notch a fifth day of consecutive gains.