【Yen Surges】USD/JPY Drops to High-140s as Powell Dismissal Rumors Trigger Dollar Sell-Off
— “Trump vs the Fed” reignites; market fears loss of U.S. monetary policy neutrality —
📌 Trigger: Trump Administration Considering Dismissal of Fed Chair Powell
- In the early hours of April 21, headlines broke that President Trump is considering removing Fed Chair Jerome Powell.
- Concerns over the independence of the Federal Reserve quickly spread, shaking confidence in U.S. monetary policy and fueling broad-based dollar selling and lower Treasury yields.
- USD/JPY fell 1.1%, touching 140.62 — the strongest yen level since September last year.
🔍 Context and Market Sentiment
| Factor | Description |
|---|---|
| 🧨 Powell Dismissal Rumors | Fears of a politicized Fed prompt aggressive dollar selling. |
| 📉 Expectation of a Dove as Replacement | Speculation that a Trump-aligned, rate-cut-favoring candidate would replace Powell puts further pressure on the dollar. |
| 💬 “Currency as a Non-Tariff Barrier” | Trump’s direct accusations of Japanese FX manipulation and auto inspections triggered yen buying. |
| 🕊 Concerns over Japan–U.S. Finance Talks | Final-stage talks set for April 24 raised fears of FX coordination or pressure to curb yen weakness. |
📊 Current Market Snapshot (as of April 21, 11:39 AM JST)
- USD/JPY: 140.64 (−1.1% vs previous NY close)
- Low: 140.62 — strongest yen since Sep 18, 2024
- Cross/JPY: EUR/JPY, GBP/JPY, AUD/JPY all falling in line with broad yen strength
📈 Strategic View: Will the Yen Rally Continue?
| Trader Commentary | Perspective |
|---|---|
| 🔸 Tetsubei Ino (MUFG) | “The dollar sell-off reflects declining trust in U.S. credibility.” |
| 🔸 Hiroshi Suzuki (SMBC) | “Market anxiety over Trump’s governance is fueling yen strength.” |
| 🔸 Marito Ueda (SBI) | “Currency is part of the Japan–U.S. talks; algos are driving the yen rally.” |
🧭 Trading Playbook for USD/JPY (This Week)
| Scenario | Strategy |
|---|---|
| 📉 USD/JPY breaks below 140.00 | Expect algos + hedge funds to accelerate selling. Medium-term target: mid-139s. |
| 📈 USD/JPY briefly rebounds to 142+ | Short-covering on hopes for Japan–U.S. diplomacy. 142+ seen as a fresh selling opportunity. |
| ⚠ Powell Retention Confirmed | Temporary dollar rebound. 140.00–140.30 may act as a short-term support zone. |
🔔 Key Events & Risk Triggers This Week
| Date | Event | Focus |
|---|---|---|
| Apr 23 | U.S. Beige Book | Watch for divergence from rate cut expectations. Could reignite dollar selling. |
| Apr 24 | Japan–U.S. Finance Minister Talks | Main focus: any explicit mention of yen strength suppression. |
| Apr 25 | Tokyo Core CPI | A surprise upside would fuel BOJ rate hike speculation → yen buying pressure. |
✅ Summary: Trump Policy Risk Becomes FX Market’s Central Driver
- Concerns over U.S. monetary policy credibility are strengthening the “dollar sell trend.”
- A triple risk setup: Japan–U.S. talks, Fed leadership uncertainty, and inflation data.
- Maintain “sell-the-rally” stance on USD/JPY. A break below 140.00 is now within view.
