USD/JPY rises above 143.00 on Japan’s harmonious dialogue Ishiba

• USD/JPY rises above 143.00 as Japan’s Ishiba underscores the need for accommodative policy.
• Investors await Fed Powell speech for new interest rate guidance.
• The Fed is expected to further cut interest rates by 75 bps this year.

USD/JPY is rising strongly above 143.00 in the North American session on Monday. The asset is strengthening as conciliatory remarks from Japan’s new leader, Shigeru Ishiba, who emerged victorious in the prime ministerial contest on Friday, weighed heavily on the Japanese yen (JPY).

Shigeru Ishiba said in an interview with public broadcaster NHK on Monday’s Asian trading program: “From the government’s point of view, monetary policy must remain accommodative in trend given the current economic conditions.”

For more interest rate guidance, investors will focus on the Bank of Japan’s (BoJ) Summary of Opinions (SOP) for its latest monetary policy meeting on September 20. In its monetary policy announcement, the BoJ left interest rates unchanged at 0.1. %-0.25% and directed them to remain data dependent. While investors were anticipating such remarks for the last quarter of the year.

Meanwhile, a slight rebound in the US dollar also weighed on the pair. The US Dollar Index (DXY), which tracks the greenback against six major currencies, is recovering intraday losses to near 100.50. The greenback is gaining ahead of Federal Reserve (Fed) Chairman Jerome Powell’s speech, which is scheduled for 17:00 GMT.

Investors will be paying close attention to Powell’s interest rate guidance to see how much the Fed will cut over the rest of the year.

According to the CME FedWatch tool, the Fed is expected to cut interest rates by another 75 basis points (bps), suggesting another 50 basis points (bps) in either of the two remaining meetings in November and December. On September 18, the Fed kicked off its rate-cutting cycle with a larger-than-usual 50 bps cut.