USD/JPY whipsaws as Trump-Fed tensions spark gold rally to $2,520
USD/JPY experienced significant volatility, dropping from 150.20 to 149.30 before recovering to 149.85 as reports of Trump's attempt to remove Fed Governor Cook rattled markets. Gold surged 1.2% to $2,520 per ounce, benefiting from safe-haven flows amid political uncertainty surrounding Federal Reserve independence. Asian equity markets showed mixed reactions, with Nikkei falling 0.8% while Shanghai Composite gained 0.4%. The yen initially strengthened on risk-off sentiment but pared gains as Cook's resistance to removal calmed immediate concerns. Trading volumes remained elevated across major pairs, with implied volatility in USD/JPY options jumping to three-week highs. Technical analysis shows USD/JPY testing support at 149.50, with resistance at 150.50. The gold rally reflects growing hedging demand against potential central bank instability and political interference in monetary policy decisions.
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