USD is heading for the best week in nine months today, as investors digesting Fed’s shift in tones. From the last meeting, Fed officials projected interest rate hikes in 2023. Soon after the projection, USD strengthened about 1.8% against EUR and 1% against AUD. DXY Index has reached above its 200-day moving average and hit 92.010. Currently it is trading around 91.968 and is on track for a 1.5% weekly gain. The gain will be the largest since last year September.
In Japan, inflation has gained for the first time in 14 months as rising commodity costs drove gasoline prices higher. Consumer prices excluding fresh food increased by 0.1% on a YoY basis, primarily lifted by the 20% jump in gasoline prices. Bank of Japan forecasts that inflation will stay below its 2% target in the mid to long term. Monetary policy will likely stay unchanged in the foreseeable future.