Forex News
- USD/JPY climbs to near 157.35 in Tuesday’s early Asian session.
- US ISM Manufacturing PMI edged lower to 52.4 in February, stronger than expected.
- Trump vowed to do “whatever it takes” in Iran, raising fears of a wider war in the Middle East.
The USD/JPY pair jumps to a near three-week high of 157.35 during the early Asian session on Tuesday. The US Dollar (USD) strengthens against the Japanese Yen (JPY) on the stronger-than-expected US economic data. Bank of Japan (BoJ) Governor Kazuo Ueda is set to speak later on Tuesday.
Data released by the Institute for Supply Management (ISM) on Monday showed that the Manufacturing Purchasing Managers' Index (PMI) declined to 52.4 in February from 52.6 in January. This figure came in better than the market expectation of 51.8. The upbeat report complicates the path for US Federal Reserve (Fed) rate cuts. Markets currently price in a high probability of no change at the upcoming March meeting.
The US and Israel’s attacks on Iran have entered their third day, and US President Donald Trump said on Monday that the US military operation could continue for weeks or more. Fears of a wider war in the Middle East and persistent geopolitical risks could boost the safe-haven currencies such as the JPY in the near term.
Hawkish comments from Japanese officials could also underpin the JPY. BoJ Deputy Governor Ryozo Himino said on Monday that while the current policy remains "somewhat accommodative," the central bank should moderately hike rates as long as its economic and price projections are met.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Commerzbank’s Charlie Lay and Moses Lim highlight that the People’s Bank of China has removed the 20% reserve requirement on foreign currency forwards, reducing the cost of short CNY positions. They argue this likely aims to slow CNY appreciation even as USD/CNY and USD/CNH have recently fallen. The analysts stress that stronger CNY fits China’s long-term rebalancing, but the process will be gradual.
PBoC eases forward reserve rules
"The People’s Bank of China (PBoC) announced that it will lift the requirements surrounding shorting the CNY. Beginning on 2 March, investors will no longer be required to hold 20% of reserves on foreign currency forward contracts. As such, it will lower the cost of entering CNY short position."
"However, it is also likely that the change is aimed at slowing the pace of CNY appreciation. CNY has gained to the strongest level against the USD since April 2023. Although the current fixing rate suggests that PBoC is not against a stronger CNY, it may be cautious over a disorderly or overly aggressive appreciation path."
"Some have argued that a stronger CNY will be part and parcel of China's rebalancing and restructuring towards a consumption-based economy. This will improve the purchasing power of Chinese consumers and businesses. However, this is likely to take time and will also entail a rebalancing of national income, from businesses and state-owned firms to consumers."
"In FX, the onshore USD-CNY rose by 160 pips to 6.86 last Friday but fell by 420 pips for the week. The offshore USD-CNH rose 180 pips to around 6.86 last Friday but declined 350 pips last week."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Pound Sterling dropped to its lowest since mid-December before recovering near 1.3400 as safe-haven Dollar demand fades mid-session.
- The BoE held rates at 3.75% in February by a narrow 5-4 vote, with Governor Bailey calling the March 19 decision a "genuinely open question" after services inflation printed at 4.4%, above the Bank's 4.1% forecast.
- Labour's shock by-election loss in Gorton and Denton to the Green Party has added a layer of UK political uncertainty, while Chancellor Reeves's Spring Statement later this week will test sentiment further.
GBP/USD fell around one-half of one percent on Monday, briefly sliding to an eleven-week low around 1.3310 in early trade before staging a mid-session recovery to settle close to the 1.3400 handle. The drop was driven almost entirely by broad US Dollar strength as the Iran conflict triggered a rush into safe-haven assets, though Sterling's recovery from the lows left a long lower wick on the daily candle, suggesting buyers stepped in near the 200-day Exponential Moving Average (EMA). Over the past week, Sterling was one of the weaker G10 currencies, losing ground to the US Dollar, Australian Dollar, Canadian Dollar, and New Zealand Dollar, while holding roughly flat against the Swiss Franc and gaining only against the Euro and Japanese Yen.
The Bank of England (BoE) held rates at 3.75% in February by a narrow 5-4 vote, with Governor Andrew Bailey casting the deciding vote to hold. Testifying before Parliament's Treasury Committee last week, Bailey described the March 19 decision as "a genuinely open question," noting that services price inflation came in at 4.4% in January, well above the BoE's 4.1% forecast. Chief Economist Huw Pill echoed the caution, warning against being "beguiled" by headline inflation falling toward the 2% target. UK labour market data have softened, with unemployment rising to 5.2% and wage growth moderating to 4.2%, which is keeping markets leaning toward a March cut despite the mixed signals from policymakers.
Domestic political uncertainty is also weighing on Sterling. The Green Party's convincing victory in last week's Gorton and Denton by-election, where Labour slipped to third place after holding the seat with a sizeable majority in 2024, has reignited questions about Prime Minister Starmer's leadership ahead of May's local elections. Chancellor Reeves's Spring Statement later this week will be watched closely for updated fiscal projections from the Office for Budget Responsibility (OBR), with any downgrade to the UK's growth outlook likely to compound the currency's recent weakness. On the US side, escalating Middle East tensions, hotter-than-expected January Producer Price Index (PPI) data, and the Federal Reserve's (Fed) reluctance to cut rates before July continue to support the Greenback.
GBP/USD daily chart
Technical Analysis
In the daily chart, GBP/USD trades at 1.3409. The near-term bias is mildly bearish as spot has slipped below the 50-day exponential moving average, while the 200-day average at 1.3425 now hovers just above price and acts as dynamic resistance. The recent failure to sustain gains above the mid-1.36s has transitioned into a sequence of lower closes, and daily stochastic holding in the lower half of its range signals persistent downside pressure rather than capitulation selling.
Initial resistance is located at the 200-day EMA near 1.3425, followed by the 1.3520 area where the 50-day EMA previously guided the advance. A daily close back above 1.3520 would be needed to ease the current downside bias and open the way toward 1.3695. On the downside, immediate support sits around 1.3350, ahead of a lower band of demand near 1.3250, where a loss would confirm a deeper corrective phase toward 1.3150.
In the weekly chart, GBP/USD trades at 1.3409. The near-term bias is mildly bullish as price holds a clear series of higher weekly closes above the rising 200-week exponential moving average near 1.30, confirming an underlying uptrend structure. The Stochastic oscillator remains in positive territory after retreating from overbought readings, indicating easing but still positive momentum rather than a full bearish reversal, which favors consolidation above recent lows rather than a sustained downside break.
Initial resistance stands at the recent swing area around 1.3650, where prior advances stalled, followed by a stronger barrier near 1.37 that guards any extension toward last quarter’s highs. On the downside, immediate support emerges at 1.3350, with a deeper floor at 1.3250 that aligns the latest reaction low with proximity to the 200-week EMA zone near 1.30. A weekly close below 1.3250 would weaken the bullish bias and expose the 1.31–1.30 band, while sustained trading above 1.3350 would keep focus on a potential retest of 1.3650.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- AUD/JPY gains 0.38% as RBA Governor Bullock’s hawkish remarks boost the Aussie.
- Price tests upper trendline of rising channel with RSI holding bullish territory.
- Break above 111.70 exposes 112.00 and 112.82, while consolidation risks linger.
The AUD/JPY recovers from earlier losses, advances some 0.38% on Tuesday even though risk aversion is ruling the financial markets as tensions in the Middle East had risen. Hawkish comments of RBA’s Governor Bullock propel the Aussie Dollar higher. At the time of writing, the cross-trades at 111.62.
AUD/JPY Price Forecast: Technical outlook
The AUD/JPY technical picture is constructive with the pair testing the top-trendline of an upslope channel ahead of the 112.00 milestone.
Momentum remains bullish, as depicted by the Relative Strength Index (RSI), yet the latest spike was shy of clearing the latest one in the RSI, which shows the pair could consolidate before aiming higher.
On further strength the first resistance is the yearly high at 111.70. Once surpassed the next stop would be 112.00, followed by 112.82, which comes from the sum of the YTD high at 111.70 plus the Average True Range (ATR) of 112.
AUD/JPY Price Chart – Daily
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Societe Generale’s team examines China’s position in U.S.–Iran tensions, noting that Iran supplies most of China’s Oil but disruptions are manageable. With around 1.5 billion barrels of strategic reserves and access to Russian supply, China can buffer shocks, while likely criticising U.S. militarisation without intervening directly in the near term.
Strategic reserves and supply diversification
"Following the U.S. attack on Iran in June 2025, Iran’s reliance on China has increased, with average shipments to China accounting for 94% of total exports, and the UAE and Iraq making up the remainder. This is important, as China has relied on Iranian barrels but could, of course, source supplies elsewhere."
"Iran ships almost all its oil to China, which will not want to see prolonged disruptions. However, these tensions have reinforced China’s energy security strategy centred on supply diversification, stockpiling and demand substitution through electrification. "
"The Strait of Hormuz supplies around 50% of China’s total oil imports, but China has built roughly 1.5 billion barrels of strategic petroleum reserves—enough to cover around 200 days of oil imports. It has also continued to invest in additional crude storage, with capacity expansion planned through 2028. Disruptions to Iranian flows are therefore manageable for China, as refiners can draw down reserves and tap large volumes of Russian supply. China will criticise the U.S. “militarisation” of the Middle East, but it is unlikely to intervene in the near term."
"The current situation raises some obvious China‑related questions: how much additional Russian oil will now flow to China, and will the oil majors buy more? What does this mean for a potential Trump–Xi meeting in April?"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
The Reserve Bank of Australia (RBA) Governor Michelle Bullock crossed the wires on Tuesday March 3 and she was hawkish. Bullock said that data justified February’s rate hike and that Middle East conflict adds to uncertainty.
Key takeaways:
"Board uncertain if financial conditions are sufficiently restrictive to return inflation to midpoint of target in reasonable timeframe.
Events in the Middle East a reminder of geopolitical uncertainty.
… prolonged shock could also have an adverse effect on global economic activity.
Range of indicators tell us that labor market conditions are tight.
Economic data since February rate hike support that move.
Underlying demand in economy is further from supply potential than we had assessed.
Large part of unexpected increase in inflation was sectors specific, likely to ease.
Believe we are well positioned for policy to respond if required.
A supply shock could add to inflation pressures.
We do have inflation that is already elevated, need to watch inflation expectations.
Every board meeting is live."
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.13% | 0.53% | 0.80% | 0.26% | 0.39% | 0.99% | 1.36% | |
| EUR | -1.13% | -0.59% | -0.33% | -0.85% | -0.73% | -0.13% | 0.24% | |
| GBP | -0.53% | 0.59% | 0.23% | -0.27% | -0.15% | 0.45% | 0.82% | |
| JPY | -0.80% | 0.33% | -0.23% | -0.50% | -0.43% | 0.20% | 0.63% | |
| CAD | -0.26% | 0.85% | 0.27% | 0.50% | 0.08% | 0.69% | 1.26% | |
| AUD | -0.39% | 0.73% | 0.15% | 0.43% | -0.08% | 0.55% | 1.03% | |
| NZD | -0.99% | 0.13% | -0.45% | -0.20% | -0.69% | -0.55% | 0.41% | |
| CHF | -1.36% | -0.24% | -0.82% | -0.63% | -1.26% | -1.03% | -0.41% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
- GBP/JPY rises 0.24% despite Middle East tensions between the US and Iran.
- Bullish engulfing pattern and RSI rebound signal potential continuation higher.
- Break above 211.00 targets 212.12 and 213.82, while 210.00 guards downside.
GBP/JPY rises during the North American session on Monday, up by 0.24% after recovering from hitting daily lows of 209.10 amid risk aversion spurred by the Middle East conflict between the US and Iran. At the time of writing, the cross-pair trades at 210.98, about to overcome the 211.00 hurdle.
GBP/JPY Price Forecast: Technical outlook
The GBP/JPY pair began the week on a lower note, but as of writing, it is forming a ‘bullish engulfing’ candle chart pattern, which, if confirmed, could open the door for further gains.
Momentum shows that buyers remain in charge with the Relative Strength Index (RSI) bottoming around its 50-neutral line, aiming higher, an indication that bulls are stepping in.
A break above 211.00 clears the path for further gains, with the next key resistance level seen at the February 25 swing high of 212.12. If surpassed, GBP/JPY's next stop would be the February 10 high at 213.82, ahead of 214.00.
On the downside, if GBP/JPY extends its losses below 210.00, bring the day’s low of 209.35 into focus. On further weakness, the next demand zone would be 209.00 ahead of the 100-day Simple Moving Average (SMA) at 207.91
GBP/JPY Price Chart – Daily
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.14% | 0.61% | 0.83% | 0.33% | 0.53% | 1.04% | 1.46% | |
| EUR | -1.14% | -0.52% | -0.33% | -0.80% | -0.60% | -0.10% | 0.32% | |
| GBP | -0.61% | 0.52% | 0.19% | -0.28% | -0.09% | 0.42% | 0.85% | |
| JPY | -0.83% | 0.33% | -0.19% | -0.48% | -0.28% | 0.23% | 0.65% | |
| CAD | -0.33% | 0.80% | 0.28% | 0.48% | 0.20% | 0.70% | 1.13% | |
| AUD | -0.53% | 0.60% | 0.09% | 0.28% | -0.20% | 0.51% | 0.93% | |
| NZD | -1.04% | 0.10% | -0.42% | -0.23% | -0.70% | -0.51% | 0.42% | |
| CHF | -1.46% | -0.32% | -0.85% | -0.65% | -1.13% | -0.93% | -0.42% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
