The US dollar's sharp decline post-FOMC was driven less by the policy decision and more by concerns over the new Fed Chair's credibility in fighting inflation. This concern manifested in a rare "twist steepening" of the 2s/30s Treasury curve, a market dynamic historically negative for the dollar.
Japan's Ministry of Finance (MOF) tactically delayed its yen-buying intervention. Instead of acting when the yen first weakened, it waited for the broad US dollar sell-off following the FOMC meeting. This allowed them to amplify an existing trend, maximizing the intervention's effectiveness and market impact.
With its FX intervention capacity, or "dry powder," severely depleted after extensive yen-buying, Japan's Ministry of Finance is running low on conventional tools. Consequently, officials are now publicly suggesting leveraging the massive Government Pension Investment Fund (GPIF) by shifting its asset allocation to support the yen.
Australia's central bank (RBA) feels confident it can hold interest rates steady because inflation's breadth is shrinking. Despite potential oil price spikes, the proportion of consumer goods experiencing extreme price growth has "dropped away quite a lot," giving the RBA room to ignore volatile commodity prices.
Despite the dovish perception of the recent Fed meeting, a sustained US dollar collapse is unlikely. Several offsetting factors provide support: the prospect of a December rate hike, superior carry versus other currencies, strong labor market data, and geopolitical risks like rising oil prices which favor the dollar as a safe haven.