Nomura Research Institute economist Takahide Kiuchi said Fed policy will likely
be the primary driver of USD/JPY despite recent BOJ rate hikes; the pair remains
above 160. He said the Fed’s latest dot plot has not fully priced in the
oil-price decline following progress in U.S.-Iran talks. Falling energy costs
should quickly push down U.S. retail gasoline prices, but the Fed’s policy path
will hinge on the trend in non-energy prices. Kiuchi added that if the Fed under
Wosh reduces communication on future policy and lowers market transparency,
volatility could increase.
