USD/JPY spikes to 109 after FOMC cuts policy rate
- FOMC lowered the policy rate by 25 basis points as widely expected.
- US Dollar Index gained traction on the FOMC statement.
- 10-year US Treasury bond yield stays deep in the negative territory.
The USD/JPY pair spiked to 109 after the Federal Open Market Committee (FOMC) announced that it lowered the policy rate by 25 basis points to 1.5%-1.75% as expected. As markets are now waiting for the FOMC Chairman Powell to deliver his remarks on the policy outlook, the USD/JPY is trading at 108.95, adding 0.07% on a daily basis.
Focus shifts to Chairman Powell's press conference
In its policy statement, the FOMC reiterated that job gains had been and the unemployment rate remained low since the September meeting and noted that it will continue to monitor the incoming information while assessing the "appropriate path" for the federal funds rate target range.
With the initial reaction, the US Dollar Index rose to a daily high of 97.81 and was last up 0.1% at 97.77. Meanwhile, the 10-year US Treasury bond yield struggled to gain traction and is down more than 2% on the day to help the pair stay in its range despite the strengthening Greenback.
Technical levels to watch for