Anna 
During the early European session on Wednesday, the USD/JPY pair traded around 155.30, marking a third consecutive day of gains. The US Dollar (USD) strengthened on the back of expectations that the Federal Reserve (Fed) could maintain higher interest rates. Hawkish comments from Minneapolis Fed President Neel Kashkari further supported the Greenback, providing a boost to the USD/JPY pair.
President Kashkari’s remarks, reported by Reuters on Tuesday, suggested a possibility of unchanged interest rates for an extended period. While the likelihood of rate hikes remains low, they are not entirely ruled out.
In addition, Richmond Federal Reserve (Fed) President Thomas Barkin commented on Monday that elevated interest rates could potentially temper economic growth in the United States (US). However, higher interest rates may help alleviate inflationary pressures, bringing them closer to the central bank’s target of 2%.
Last week, the Japanese Yen (JPY) appreciated amid speculation of intervention by Japanese authorities. Reuters reported data from the Bank of Japan (BoJ) indicating that Japanese authorities may have allocated approximately ¥6.0 trillion on April 29 and ¥3.66 trillion on May 1 to support the JPY. However, these interventions offered only temporary relief, given the significant interest rate differentials between Japan and the United States (US).
Despite ongoing warnings from Japanese authorities against extreme currency movements, the Japanese Yen depreciated. Finance Minister Shunich Suzuki reiterated that authorities are prepared to respond to excessive foreign exchange volatility, while Bank of Japan (BoJ) Governor Kazuo Ueda emphasized the importance of assessing the impact of Yen movements on inflation to guide policy decisions.
