While the USD/JPY reacts to comments made by Fed Chair Powell, the bottom appears to be firm.
The trend of a strong dollar continues. The anticipated congressional testimony by the Fed Chair Powell referred to an interest rate increase in his pre-released remarks, which resulted in a stronger dollar. The USD/JPY exchange rate rose above the recent high to the level of 142.30 yen. After Chair Powell mentioned a gradual interest rate hike during the subsequent Q&A, there was a temporary sell-off of the dollar. However, the downside risk for USD/JPY remains relatively low, and the overall market sentiment is very strong. While many countries and regions, including the US and the Eurozone, are tightening their monetary policies, there is an increase in selling against regions like Japan and China, which still maintain a strong monetary easing stance.
This trend is expected to continue today as well. The anticipation of reaching the 142 yen level again is strong, and such a movement is likely to occur.