FOMC and Surging Oil Take Center Stage | USD/JPY Approaches 160
■ Market Overview
The biggest market themes are:
FOMC + Rising Oil Prices
Progress in the Middle East remains slow.
Iran’s latest proposal mainly focuses on reopening the Strait of Hormuz, while the nuclear issue — the U.S.’s top priority — remains unresolved.
→ President Donald Trump remains skeptical
→ Geopolitical risks continue
As a result,
NY crude oil surged from 100 USD to above 103 USD
→ Safe-haven USD buying + inflation concerns are returning
■ FX Market Dynamics
- USD/JPY rose to 159.78
- EUR/USD pushed lower
- GBP/USD remains near the lows
→ Higher oil + rising U.S. yields are driving broad USD buying
■ Core Market Theme
“Oil prices are changing the meaning of the FOMC”
- Higher oil → renewed inflation pressure
- Inflation → higher-for-longer rates
→ This increases the probability of a more hawkish FOMC tone
■ Tonight’s Most Important Event
Federal Open Market Committee (FOMC)
→ Rate hold is almost fully expected
The real focus is:
Chair Jerome Powell’s press conference
Key questions:
- Will he emphasize maintaining high rates?
- Will he show concern about slowing growth?
→ The market will react most to the tone, not the rate decision itself
■ Scenario Outlook
① Hawkish FOMC
→ Rate cut expectations pushed back
→ USD buying accelerates
→ Risk of USD/JPY breaking above 160
② More Dovish Tone
→ Yields fall
→ USD correction lower
③ Middle East Escalation Takes Priority
→ Oil matters more than FOMC
→ Safe-haven USD buying continues
■ Strategy Points
- Be cautious chasing USD strength ahead of FOMC
- Watch intervention risk near 160 in USD/JPY
- Confirm whether oil can hold above 103 USD
■ Summary
The current market is:
“A market where oil controls the meaning of the FOMC”
→ It is no longer enough to watch rates alone
→ Geopolitics must be part of the analysis
→ The most important factors are:
