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  • USD/JPY holding tight in a consolidative market.
  • Fed’s Powell and US jobs will be the final scheduled catalysts for the holiday-shortened week.

USD/JPY has been holding in consolidation and ranged sideways between 108.60 and 109.10 overnight, currently sitting at 108.90 between a slightly narrower range in Asia of between 108.79 and 108.99.

In NY, the attention was on the Federal Reserve Open Market Committee’s minutes of the unscheduled meeting on 15 March. There was a muted response but they did reveal much anxiety and uncertainty over COVID-19 with most members agreeing that a 100 bp cut would be appropriate due to uncertainty over the length and severity of the decline in economic activity.

FOMC minutes: FOMC minutes: All participants viewed near-term economic outlook as having deteriorated sharply

Eyes turn to US data and Fed’s Powell

Gien the Easter break, it could be a quiet session for the day ahead until we here from Federal Reserve’s chair Jerome Powell who delivers a speech titled “Economic Update” via webcast from 10:00, NY time. 

Markets will be tuning in to Powell for further clues and a better insight into the Fed’s forecasting and potential measures in combatting an economic and debt crisis pertaining to the COVID-19 lockdowns. Powell would need to come out with something which the minutes released in the US session hasn’t already highlighted though for there to be a significant impact on markets which have already priced-in the lower bound target and uncertainties of board members.

There will also be a focus on the US data and initial jobless claims again after two record-breaking weeks. “The median forecast is 5.5 million new filings in the week to 4 April, after 6.648 million the prior week, which was 10 times larger than the worst week of the GFC. Continuing claims for the week to 28 March are seen jumping to 8.236 million,” analysts at Westpac explained. 

USD/JPY levels