USD/JPY rallies above 143.00 on Japan Ishiba's dovish dialogue

• USD/JPY soars above 143.00 as Japan Ishiba emphasized the need for an accommodative policy stance.
• Investors await Fed Powell's speech for fresh interest rate guidance.
• The Fed is expected to cut interest rates further by 75 bps this year.

The USD/JPY pair surges strongly above 143.00 in Monday's North American session. The asset strengthens as dovish remarks from Japan's new leader Shigeru Ishiba, who came out victorious in the Prime Ministerial contest on Friday, weighs heavily on the Japanese Yen (JPY).

Shigeru Ishiba said in an interview with public broadcaster NHK in Monday's Asian trading hours, "From the government's standpoint, monetary policy must remain accommodative as a trend given current economic conditions."

For more interest rate cues, investors will focus on the Bank of Japan (BoJ) Summary Of Opinions (SOP) for the latest monetary policy meeting that took place on September 20. In the monetary policy announcement, the BoJ left interest rates unchanged at 0.1%-0.25% and guided them to remain data-dependent. While investors were anticipating hawkish remarks for the last quarter of the year.

Meanwhile, a slight recovery in the US Dollar has also weighed on the pair. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, recovers its intraday losses and rises to near 100.50. The Greenback gains ahead of Federal Reserve (Fed) Chair Jerome Powell's speech, which is scheduled at 17:00 GMT.

Investors will pay close attention to Powell's interest rate guidance to know how much the Fed will cut interest rates in the remainder of the year.

According to the CME FedWatch tool, the Fed is expected to reduce interest rates further by 75 basis points (bps), suggesting that there will be another 50 basis points (bps) in any of the two remaining meetings in November and December. On September 18, the Fed started its rate-cut cycle with a larger-than-usual cut of 50 bps.