USD/JPY rattles post-Fed rate call, 151.60 remains key sticking point

• USD/JPY took a quick plunge into 151.25 after Fed held rates.
• FOMC sees slightly higher rates in the future than previously expected.
• Markets shrug off higher growth forecast, price in additional easing.

USD/JPY took a quick dive into 151.25 after the Federal Reserve (Fed) held its main reference rate at 5.5% as markets had broadly predicted. Risk-hungry investors are shrugging off higher-than-previous growth expectations and interest rate forecasts from the Federal Open Market Committee (FOMC). According to the FOMC, US Gross Domestic Product (GDP) growth through 2024 is going to be slightly higher than forecast, and year-end interest rates are likely to be higher than previously expected.

Despite upside shifts to the Dot Plot, the Fed still expects three rate cuts through 2024 for around 75 basis points, and markets are keeping hopes of near-term rate trimming to begin closer to the middle of the year. Fed Chairman Jerome Powell is due at the bottom of the hour at 18:30 GMT.

Read more: Fed leaves interest rate unchanged at 5.25%-5.5% as forecast

USD/JPY 5-minute chart