Yen Falls as Fed Holds Rates, Warsh Dot Plot Signals Caution

The USD/JPY pair climbed to approximately 160.40 following the Federal Reserve's decision to keep its benchmark interest rate steady in the 3.50%-3.75% range. The move was widely anticipated, marking the first policy meeting chaired by Kevin Warsh.

The accompanying dot plot from Warsh's debut meeting suggested a cautious stance on future rate moves, sparking renewed dollar buying. The yen, sensitive to US rate differentials, bore the brunt of the shift as traders priced in a prolonged hold by the Fed.