The Federal Reserve under Chair Kevin Warsh has indicated a tighter monetary policy trajectory, with forecasts pointing to two 25 basis point rate hikes in 2026. According to FX Street, Deutsche Bank strategists expect these increases to occur in September and December, pushing the fed funds rate to around 4.1%.
Meanwhile, gold prices have fallen for a third consecutive session, dropping over 2% for the week, as investors reassess ongoing US-Iran negotiations alongside the evolving US monetary policy outlook. ING strategists Warren Patterson and Ewa Manthey highlighted this downward trend in gold on FX Street.
For Japanese markets, these developments could influence FX and precious metals trading, especially given Japan’s sensitivity to US policy shifts and geopolitical tensions impacting safe-haven assets.