• USD/JPY rebounds to 151.00 as the US Dollar bounces back.
• Upwardly revised US economic outlook has supported the US Dollar.
• Rising expectations for Japan’s intervention fail to offset BoJ’s accommodative guidance.

The USD/JPY pair finds support after correcting to near 150.27 in the European session on Thursday. The asset rebounds as the US Dollar recovers after refreshing a five-day low. The US Dollar Index (DXY) bounces back from 103.17 as the Federal Reserve’s (Fed) latest economic projections showed that the United States growth rate for 2024 was revised higher to 2.1% from 1.4% forecasted in December’s policy meeting.

There is a region-specific demand in the global markets. Risk-sensitive assets in Europe are facing pressure as the Swiss Nation Bank (SNB) surprisingly reduced interest rates by 25 basis points (bps) to 1.25% while demand for antipodeans and Asian currencies is upbeat. S&P 500 futures have posted significant gains in the London session.

The market sentiment is broadly upbeat as the Fed’s dot plot for the March meeting, released on Wednesday, indicated that three rate cut projections for this year remain alive. In the monetary policy statement, Fed Chair Jerome Powell said that he is confident in the story of easing underlying price pressures despite recent hot inflation readings.

This has led to a sharp increase in speculation that the Fed will begin rate cuts from the June policy meeting. The CME FedWatch tool shows that there is a 74% chance that a rate cut will be announced in June.

Meanwhile, the Japanese Yen rose against the US Dollar after speculation of stealth intervention in the FX domain escalated. Japan's Finance Minister Shunichi Suzuki said, "Currencies must move in a stable manner and that he is closely watching foreign exchange moves with a high sense of urgency."

However, the Japanese Yen struggles to hold strength as the near-term guidance for the monetary policy by the Bank of Japan (BoJ) is still accommodative despite exiting the expansionary policy stance.