Yen Firms Up on Dollar Weakness

Fundamental Overview

The USD regained some ground in the past days but the momentum stalled as December rate cut odds jumped following Fed’s Williams dovish comments.

As of now, the December rate cut odds stand around 70% but we won’t get much data before the FOMC meeting, so the focus will likely be mainly on jobless claims and ADP data. Weak data should keep weighing on the greenback, while strong data could provide some short-term support.

On the JPY side, nothing has changed. The currency has been weakening since the last BoJ policy decision where the central bank left interest rates unchanged as expected with again two dissenters voting for a hike.

There were no surprises but Governor Ueda focusing on spring wage negotiations suggested that the next hike could be delayed to January or even March 2026. The probabilities for a December hike rose a little to 30% recently as speculation of a possible hike due to the fast yen depreciation strengthened.

USDJPY Technical Analysis – Daily Timeframe

USDJPY daily

On the daily chart, we can see that USDJPY continues to pull back from the highs after a strong rally where we almost reached the 158.00 handle. We can see that we have an upward trendline defining the bullish momentum. The buyers will likely lean on the trendline with a defined risk below it to position for a rally into the 160.00 handle. The sellers, on the other hand, will look for a break lower to extend the pullback into the 154.00 level.

USDJPY Technical Analysis – 4 hour Timeframe

USDJPY 4 hour

On the 4 hour chart, there’s not much else we can add here as the buyers will have a better risk to reward setup around the trendline, while the sellers will wait for a downside break to increase the bearish bets into new lows.

USDJPY Technical Analysis – 1 hour Timeframe

USDJPY 1 hour

On the 1 hour chart, we can see that we have a minor downward trendline defining the current bearish momentum. The sellers will likely continue to lean on the trendline to keep pushing into the major upward trendline, while the buyers will look for a break higher to increase the bullish bets into new highs. The red lines define the average daily range for today.

Upcoming Catalysts

Today we get the weekly ADP jobs data and the US Consumer Confidence report. We will also get the September US PPI and Retail Sales reports. Tomorrow, we get the most recent US Jobless Claims figures and the September Durable Goods Orders report. On Thursday, we have the US Thanksgiving holiday, while on Friday we conclude the week with the Tokyo CPI report. This article was written by Giuseppe Dellamotta at investinglive.com.

The Japanese yen rose to around 156.6 per dollar on Tuesday, recovering losses from the previous session amid speculation that authorities could intervene to curb the currency’s decline.

On Sunday, Takuji Aida, an adviser to Prime Minister Sanae Takaichi, said Tokyo is prepared to actively intervene in currency markets to offset the negative economic effects of a weak yen, echoing remarks from Bank of Japan Governor Kazuo Ueda and Finance Minister Satsuki Katayama.

Markets are eyeing upcoming US holidays this week as potential windows for Japanese intervention, as periods of low liquidity could amplify the impact.

The yen has been weakening since early October following PM Takaichi’s election, as she introduced a massive fiscal package and signaled support for loose monetary policy.

EUR/USD

• 1.1680 (EUR 1.30 bn)
• 1.1625 (EUR 1.39 bn)
• 1.1500 (EUR 1.50 bn)

USD/JPY

• 155.00 (US$ 761.93 mn)

GBP/USD

• 1.3435 (GBP 282.82 mn)

USD/CHF

• 0.8050 (US$ 408.74 mn)
• 0.7870 (US$ 212.00 mn)

USD/CAD

• 1.4200 (US$ 519.71 mn)
• 1.4120 (US$ 723.08 mn)
• 1.3970 (US$ 770.60 mn)
• 1.3900 (US$ 693.89 mn)

AUD/USD

• 0.6550 (AUD 3.03 bn)

NZD/USD

• 0.5480 (NZD 1.01 bn)

EUR/GBP

• 0.8810 (EUR 409.27 mn)

For more information on how to use this data, you may refer to this post here. This article was written by Giuseppe Dellamotta at investinglive.com.

The Japanese yen steadied near 157 per dollar on Friday, halting its recent slide after Finance Minister Satsuki Katayama suggested that intervention was possible to curb excessive volatility and speculative moves.

Traders now anticipate that authorities could act again if the currency approaches 160 per dollar, consistent with past intervention levels.

Despite the pause, the yen is set to lose nearly 2% for the week, remaining near its weakest level in ten months ahead of an expected stimulus announcement from Prime Minister Sanae Takaichi’s government, projected to exceed 20 trillion yen.

The massive spending plan has raised concerns over Japan’s fiscal health, fueling a 'Sell Japan' trend that pressured both the yen and domestic bonds.

On the data front, Japan’s core inflation rose to a three-month high in October, while exports exceeded expectations.

EUR/USD

• 1.1600 (EUR 2.11 bn)
• 1.1500 (EUR 3.00 bn)

USD/JPY

• 155.00 (US$ 1.61 bn)

GBP/USD

• 1.3250 (GBP 1.05 bn)
• 1.2900 (GBP 597.22 mn)

USD/CHF

• 0.8050 (US$ 280.70 mn)
• 0.7940 (US$ 302.49 mn)

USD/CAD

• 1.4055 (US$ 278.90 mn)
• 1.3275 (US$ 340.00 mn)

AUD/USD

• 0.6500 (AUD 689.52 mn)
• 0.6550 (AUD 445.6 mn)

NZD/USD

• 0.5675 (NZD 300.00 mn)
• 0.5455 (NZD 530.00 mn)

EUR/GBP

• 0.8750 (EUR 843.50 mn)

For more information on how to use this data, you may refer to this post here. This article was written by Giuseppe Dellamotta at investinglive.com.

EUR/USD • 1.1500 – €2.05bn • 1.1630 – €1.19bn • 1.1600 – €1.07bn

USD/JPY • 155.00 – $1.49bn • 150.00 – $1.3bn

AUD/USD • 0.6550 – AUD739.4m • 0.6500 – AUD736.7m • 0.6530 – AUD422.4m

GBP/USD • 1.3250 – £679m • 1.2800 – £597.2m • 1.2750 – £567.7m

NZD/USD • 0.5675 – NZD300m

EUR/GBP • 0.8750 – €523.6m

USD/CNY • 7.1089 – $1.2bn • 7.1080 – $770m

Market note: Clusters in EUR/USD and USD/JPY may help anchor spot intraday, with AUD strikes adding weight around 0.65–0.6550 into the roll. This article was written by Eamonn Sheridan at investinglive.com.