USD/JPY trades firmly around 148.70 ahead of Japan's elections

• USD/JPY jumps to near 148.70 as the US Dollar trades firmly.
• US President Trump confirmed that he will not fire Fed's Powell.
• Economists expect Japan's ruling party to fail to gain majority in general elections.

The USD/JPY pair gains over 0.5% to near 148.70 on Thursday. The pair trades firmly as the US Dollar (USD) demonstrates strength, following United States (US) President Donald Trump refuted to reports stating the dismissal of Federal Reserve (Fed) Chair Jerome Powell soon.

A report from Reuters showed that US President Trump has received positive response from Republican lawmakers about firing Jerome Powell. However, Trump denied reports but kept criticizing Powell for not lowering interest rates.

During the European session, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trade close to a fresh three-week high slightly below 99.00.

Meanwhile, comments from Fed officials pointing to de-anchoring consumer inflation expectations due to sectoral tariffs imposed by Washington have also supported the US Dollar. On Wednesday, New York Fed Bank President John Williams said in a speech at New York Association for Business Economics that the impact of tariffs on inflation has "just started building up" as additional levies on nations are yet to be fed into the economy.

His comments were backed by the US Consumer Price Index (CPI) report for June, which showed that prices of goods largely imported by the US rose sharply.

In Japan, investors doubt the political stability as recent polls indicate that Japan's ruling coalition - the Liberal Democratic Party (LDP) and Komeito - might lose its majority in the Upper House election on July 20, Reuters reported. Such a scenario will be unfavorable for the Japanese Yen (JPY) at a time when Washington has signaled that a trade deal with Japan is unlikely in the near term.