USD: Powell holds the dovish line The dollar closed yesterday's FOMC day lower, as it had done for the three prior FOMC meetings. We and the market were a little surprised that there was no further assessment of the strong US activity data or particularly the high inflation data and instead, Fed Chair Jerome Powell merely reiterated the recent line that it would take longer for the Fed to gain confidence to cut rates. As we discuss in our Fed review piece, the dollar seemed to react the most to comments from Powell that a rate hike was unlikely and that yesterday's JOLTs job opening data showed restrictive policy was working. The 10bp drop in rates at the short end of the US curve was enough to see DXY sell-off 0.5%.  When trying to recover yesterday, the DXY received another hit when Japanese authorities were thought to have intervened again late in the US afternoon – a time of thin liquidity and perhaps a reminder that intervention will still very much be an option during Japan's four-day public holiday starting tomorrow. Given that the Bank of Japan is thought to be selling large clips of dollars – perhaps as much as $20-35bn per intervention session – the market is already starting to consider the size of available FX reserves for this purpose. We think Japanese authorities will intervene sparingly but are probably hoping they can stabilise USD/JPY ahead of a broad turn lower in the dollar, just as they did in September/October 2022.