Ella 
USD/JPY fell 0.9% on Wednesday as markets tend to bet that the Federal Reserve (Fed) will accelerate the pace of interest rate cuts in 2024, with some investors expecting the Fed’s rate cuts to begin as soon as March next year.
The Fed agreed with the market’s view that rate cuts are likely in 2024, the Fed said at its December policy meeting, with the Fed’s dot plot of interest rate expectations showing up to three cuts by the end of 2024, totaling 75 basis points. Market expectations quickly outweighed the Fed’s own outlook, with money markets pricing in more than six rate cuts by next year, totaling more than 160 basis points.
A broad market rally triggered by the prospect of a Fed policy adjustment continues to keep market indicators anchored in risk territory, with several Fed officials trying to tamp down bets on a rate cut, but so far going unnoticed.
Japan’s retail trade data for November will be released early Thursday, with retail trade expected to rise to 5% for the full year through November, up from 4.2% in October.
The latest number of people filing for unemployment benefits in the United States on Thursday will be the main data focus this week. The market expects that the number of people filing for unemployment benefits will increase slightly from 205,000 to 210,000 in the week ending December 22, compared with last week. to 205,000.
