USD Strengthens as Fed Caution Overshadows BoJ's Dovish Hold

The US Dollar Index has gained 0.5% to 106.20, supported by Federal Reserve officials signaling a cautious approach to future rate cuts. The Bank of Japan maintained its ultra-loose monetary policy at 0.10%, despite market expectations for potential tightening. USD/JPY rose 0.8% to 153.50, breaking above the 153.00 resistance level. Fed Governor Bowman emphasized the need for sustained progress on inflation before considering rate reductions, contrasting with market expectations of aggressive easing in 2025. The diverging monetary policy outlooks between the Fed and BoJ continue to support dollar strength. Technical indicators show the DXY approaching the 106.50 resistance, while USD/JPY faces next resistance at 154.00. Traders should monitor upcoming US GDP data and Japanese inflation figures for further directional cues on the dollar's momentum.