USD/JPY jumps above 157.00 amid Fed rate cut uncertainty

• USD/JPY rises to over a 10-month high around 157.05 in Thursday's early Asian session.
• Fed's October Minutes, several members thought a December rate cut "could be appropriate," but many viewed it as "likely not appropriate."  
• Japan's Katayama said the government was closely monitoring markets. 

The USD/JPY pair climbs to near 157.05, the highest since January 15, during the early Asian session on Thursday. The US Dollar (USD) strengthens against the Japanese Yen (JPY) as traders assess the latest Federal Open Market Committee (FOMC) Minutes. Traders await the release of the US September Nonfarm Payrolls (NFP) later on Thursday, followed by the Philly Fed Manufacturing Index, Existing Home Sales, and the speeches by the Fed's Lisa Cook and Austan Goolsbee. 

Federal Reserve (Fed) officials are divided and cautious about the path forward for interest rates. Most participants indicated further rate cuts would likely be appropriate over time, but several indicated they did not necessarily view a reduction in December as appropriate, according to minutes of the Federal Open Market Committee's (FOMC) October 28-29 meeting.

The decision to reduce the federal funds rate was split, with one member favoring a jumbo 50 basis point (bps) cut and another preferring to leave rates unchanged. Expectations for a December rate cut have fallen following the release of the minutes, with the CME FedWatch tool showing only a 30% chance for a cut. This, in turn, provides some support to the Greenback against the JPY. 

On the other hand, the upside for the pair might be limited amid intervention fears. Finance Minister Satsuki Katayama said that the Japanese government was closely monitoring markets with a high sense of urgency. "The big move has obviously been done over yen... The risk of intervention obviously rises," said Sonja Marten, Head of Research Currencies and Monetary Policy at DZ BANK.