The U.S. dollar retreated on Thursday in Asia after Federal Reserve chairman Jerome Powell signalled the central bank is ready to cut interest rates soon.

The U.S. dollar index that tracks the greenback against a basket of other currencies was down 0.2% to 96.507 by 12:47 AM ET (04:47 GMT).

Despite a strong jobs report released last week, Powell indicated that overall growth has “moderated” and said “there is a risk that weak inflation will be even more persistent than we currently anticipate.”

“Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture reported heightened concerns over trade developments,” Powell said, noting that business investment “seems to have slowed notably” in recent months.

The better-than-expected jobs report was “great news,” he said, but wages did not rise enough to trigger much inflation which he believes is still too low.

The Fed chief is due back later today when he’ll appear before the Senate Banking Committee.

Meanwhile, the minutes from the central bank’s June policy meeting showed many policy makers also thought more stimulus would be needed soon.

The USD/JPY pair fell 0.5% to 107.96. Kazuo Momma, a former executive director at the Bank of Japan (BOJ), said in an interview Tuesday that the central bank needs to extend its pledge to keep the country’s extremely low rates intact.

“The length of the extension will depend on the BOJ’s economic outlook,” said Momma. “It will aggressively extend the guidance if it’s clear the global economy won’t pick up within six months,” he added.

“The BOJ is now putting weight on the importance of sending a strong message that it will firmly continue with monetary easing,” he said.

Governor Haruhiko Kuroda and his board will conclude a two-day policy meeting on July 30.

The AUD/USD pair gained 0.3% to 0.6974.

The USD/CNY pair was down 0.1% to 6.8643.

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