Federal Reserve Policy to Dominate USD/JPY Amid Oil Price Decline, Says Nomura Economist

USDJPY-0.02%
GAS-3.62%
According to Nomura economist Takahide Kiuchi, on June 18, Federal Reserve policy will likely become the primary driver of USD/JPY movements, with the pair holding above 160 despite recent Bank of Japan rate hikes. Kiuchi noted that the Fed's latest dot plot has not fully reflected the impact of oil price declines following progress in U.S.-Iran negotiations. He stated that while lower energy costs are expected to quickly push down U.S. retail gasoline prices, the Fed's future policy path will depend mainly on non-energy price trends.
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