Forex News
- USD/JPY struggles for a firm intraday direction, though the downside remains cushioned.
- Japan’s fiscal woes and the wide US-Japan rate differential continue to undermine the JPY.
- Geopolitical risks support the USD, though receding Fed rate hike bets keep a lid on the pair.
The USD/JPY pair is seen oscillating in a narrow band just above the 159.00 mark during the Asian session on Tuesday, awaiting a fresh catalyst before the next leg of a directional move. Meanwhile, the fundamental backdrop seems tilted in favor of bulls and suggests that the path of least resistance for spot prices is to the upside.
The Japanese Yen (JPY) might continue with its relative underperformance amid worries over Japan's worsening fiscal condition due to surging long-term interest rates, a massive national debt burden, and expansionary budget pressures. Moreover, interest rates in Japan remain significantly lower than those in other major economies, which keeps the so-called JPY carry trade active. These, to a large extent, have offset the effect of a joint US-Japan currency intervention in late July and might continue to act as a tailwind for the USD/JPY pair.
Meanwhile, Treasury Secretary Scott Bessent announced Monday that the US is launching a campaign to isolate Iran from the global economy and warned that any country conducting business with Iran risks facing US sanctions. Iran's Supreme National Security Council secretary, Mohsen Rezaei, has already warned that the Islamic Republic would halt all oil exports through the Strait of Hormuz and anywhere else in the Persian Gulf if economic war continues. This keeps the war-risk premium in play and supports the US Dollar (USD).
Furthermore, inflation risks stemming from volatile oil prices underpin prospects for at least one interest rate hike by the US Federal Reserve (Fed) and act as a tailwind for the Greenback. Traders, however, seem hesitant to place aggressive bullish bets on the USD amid diminishing odds for an immediate Fed policy tightening. Adding to this, the US Treasury's bond market intervention failure revives fiscal sustainability concerns, which, in turn, are seen acting as a headwind for the buck and the USD/JPY, warranting some caution.
The market focus remains on the release of the US Personal Consumption Expenditures (PCE) Price Index on Wednesday. Adding to this, Fed Chair Kevin Warsh's speech at the Jackson Hole Symposium will be scrutinized closely for more cues about the future policy path. The outlook, in turn, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the USD/JPY pair.
USD/JPY 4-hour chart
Technical Analysis
The USD/JPY pair holds a mild bullish bias above the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibonacci retracement of the corrective decline from a four-decade high. Further up, resistance is seen at the 50.0% retracement at 159.59, followed by the 61.8% retracement at 160.62, with higher barriers at 162.09 and 163.96.
On the downside, initial support comes from the 100-period SMA at 158.67 and the nearby 38.2% retracement at 158.56, with a deeper floor at the 23.6% level around 157.28, where buyers would be expected to re-emerge if the current consolidation unwinds.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Tuesday at 6.7852 compared to the previous day's fix of 6.7841 and 6.7219 Reuters estimate.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
- Euro gains as rising oil prices, bond yields, and Middle East tensions drive expectations for a September ECB rate hike.
- US Dollar remains under pressure as Treasury's plan to double long-term bond buybacks.
- Markets await US consumer confidence, PCE inflation data, and Fed Chair Kevin Warsh's Jackson Hole speech.
EUR/USD inches higher after posting minor losses in the previous day, trading around 1.1670 during the Asian hours on Tuesday. The pair finds support as rising oil prices, elevated bond yields, and escalating Middle East tensions drive Eurozone inflation concerns. These factors have boosted expectations for a more hawkish stance from the European Central Bank (ECB), which is widely anticipated to deliver a 25-basis-point rate hike in September following its June tightening.
Meanwhile, sovereign yields on longer-maturity Eurozone securities remain near multi-decade highs. They are tracking US yield movements driven by worries over Washington’s deficit spending and fears that the Federal Reserve (Fed) may be taking a complacent approach to persistent inflation.
Strategists at Scotiabank note that the flow of macro news has been relatively light, with "fundamental releases have been limited" ahead of what they describe as this week’s key event: "the German IFO business sentiment figures scheduled for Tuesday." They add that shifting rate dynamics are weighing modestly on the single currency, as "yield spreads have pulled back slightly, eroding some of the EUR’s support as US Treasury yields have climbed over the past week or so."
Meanwhile, the US Dollar (USD) remains under pressure after the US Treasury decided to double its buyback operations for longer-dated bonds. Reports indicate that US Treasury Secretary Scott Bessent could utilize nearly $1 trillion from the Treasury General Account to fund these operations. Tensions are also escalating geopolitically, as the US expands secondary sanctions against entities doing business with Iran. Secretary Bessent warned that a major financial institution could face sanctions this week, explicitly noting that China will not be exempt.
Looking ahead, market participants are focused on key US economic events scheduled for this week. Consumer confidence data will be released on Tuesday, followed by the Personal Consumption Expenditures (PCE) price index on Wednesday. Additionally, Federal Reserve Chair Kevin Warsh is set to deliver a speech on Friday at the annual Jackson Hole symposium, which could offer further direction for the Greenback.
Strategists at Scotiabank highlight that the “calendar and event risk this week is significant,” noting that the combination of key data releases and policy signals is encouraging investors to reassess exposures. In their view, this backdrop creates “the potential for some moderate gains in the USD broadly in the short run” as market participants “pare back positioning,” with the Dollar benefiting from a more cautious stance ahead of the upcoming risk events.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro 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 then its currency will gain in value 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/USD falls as Iran sanctions sour global risk appetite.
- RBA minutes and Jacobs speech could shape rate expectations.
- Australia CPI and US PCE drive next market catalysts.
The Australian Dollar began the week on a lower note, trading with a 0.28% loss against the Greenback as risk appetite soured after the US Department of the Treasury imposed sanctions on Iran-linked entities. At the time of writing, the pair trades at 0.7159
AUD/USD weakens as Iran sanctions dent sentiment before inflation data
Wall Street ended Monday’s session in the red, while US Treasury Secretary Scott Bessent embarked on a mission to cut off Iran from the global economy. Aside from this, data in the US revealed that the Chicago Fed’s National Activity Index dipped to -0.08 from 0.06 in July, remaining near the trend level 0 level throughout the year.
The White House, through Bessent, revealed sanctions on Tehran, targeting five areas: digital assets, technology, gold, aviation and shipping. He added that they’re giving a timeline to world leaders to cut ties with Iran, while saying that Trump will speak with countries.
In the meantime, the US economic docket will pick up the pace starting Tuesday, with growth, inflation, and jobs data releases, including the Fed’s favourite inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index. Aside from this, eyes are on Fed Chair Kevin Warsh's speech at Jackson Hole on August 28.
In Australia, the economic docket will feature the release of the Reserve Bank of Australia’s (RBA) last meeting minutes, while the RBA’s head of domestic markets, David Jacobs, will cross the wires.
After that meeting, money markets had priced in a slim 14% chance that the RBA would raise rates at the September 29 meeting, with odds of holding rates expected to stay at 86%, according to Prime Terminal.
The Aussie economic calendar will feature inflation data on Wednesday, with economists estimating that prices rose 0.8% in July. In the twelve months to July, analysts estimate that inflation eased from 3.8% to 3.2%, while the trimmed-mean Consumer Price Index (CPI) is forecast to drop by a tenth to 3.5%.
AUD/USD Price Forecast: Technical Outlook
In the daily chart, AUD/USD trades at 0.7150, maintaining a bullish near-term bias as spot holds above the clustered 50-, 100- and 200-day simple moving averages (SMAs) around 0.7001. The pair is also supported by rising trend lines coming in below 0.7000, while the relative strength index (RSI) at 65 suggests firm but not yet extreme upside momentum as price grinds higher within the broader uptrend.
On the topside, initial resistance is seen near the upward-sloping trend barrier around 0.7320, with the longer-term descending trend line from 0.8015 and subsequent broken trend levels at 0.8472 and 0.9208 likely to cap any extended advance. On the downside, immediate support is located at the current price area around 0.7150, ahead of the SMA cluster near 0.7001; a deeper pullback would expose the next structural floors at the rising trend supports around 0.6983 and 0.6894.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann keep a downside bias on USD/CNH after the pair dipped to 6.7180 and closed near 6.7210. Intraday, they expect any further weakness to be limited within 6.7150–6.7240 and not to break clearly below 6.7150, but on a 1–3 week view they warn that a sustained move under 6.7200 would open 6.7000.
Downside bias with key trigger level
"24-HOUR VIEW: While we highlighted last Friday that “there is a chance for USD to dip below 6.7200”, we pointed out that “given the oversold conditions, any decline should stay within a 6.7180/6.7280 range.” USD subsequently dipped to 6.7180 before recovering slightly to close little changed at 6.7213 (-0.07%). Although the bias remains tilted to the downside, based on the prevailing momentum, any decline is likely part of a lower range of 6.7150/6.7240. In other words, USD is unlikely to break clearly below 6.7150."
"1-3 WEEKS VIEW: We have held a negative USD view since early this month (as annotated in the chart below). Last Friday (21 Aug, spot at 6.7240), we highlighted that “downward momentum continues to increase, and looking ahead, if USD breaks and holds below 6.7200, the next level to watch is 6.7000.” USD subsequently fell to a low of 6.7180 before closing at 6.7213 (-0.07%). We will continue to hold the same view as long as 6.7340 (‘strong resistance’ previously at 6.7380) is not breached."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/JPY holds near 185.60 after rebounding from intervention lows.
- Bullish RSI supports recovery, but neutral structure persists.
- Break above 187.50 exposes yearly high and 188.00.
The EUR/JPY trades horizontally on Monday as market participants remain reluctant to push the cross higher amid fears of potential intervention by Japanese authorities, even though they have remained shut following the coordinated action by the US and Japan. The cross trades at 185.59, virtually unchanged.
EUR/JPY Price Forecast: Technical Outlook
After falling from around 187.44 towards 182.12 on the three-day intervention day, the EUR/JPY has bounced off the 182.00 area and rallied back near the 186.00 mark. Momentum has shifted modestly bullish, as indicated by the Relative Strength Index (RSI), which has been bullish since mid-August.
From a market structure perspective, EUR/JPY is neutrally biased, but it could resume bullish if it breaks above the year-high near 188.00. However, on its way north, the first resistance is at 187.00, followed by the psychological 187.50 mark. A breach of the latter will expose the yearly high of 187.95 ahead of 188.00.
Downwards, the first support for EUR/JPY is the 100-day Simple Moving Average (SMA) at 185.14, followed by the 50-day SMA at 184.72. Once surpassed, the next stop is the 200-day SMA at 184.16, followed by 184.00.
EUR/JPY Price Chart – Daily
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro 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 then its currency will gain in value 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.
- GBP/JPY holds near 217.00 as horizontal price action persists.
- RSI remains bullish, but stalls near the 60 reading.
- Break below 216.00 exposes 215.68 and 215.00 supports.
The GBP/JPY consolidates near familiar levels around 217.00 on Monday, as risk aversion dominates markets, with flows moving into haven assets like the US Dollar and Gold amid uncertainty over the Middle East conflict.
GBP/JPY Price Forecast: Technical Outlook
Price action remains horizontal, while momentum has shifted bullish, as depicted by the Relative Strength Index (RSI): After bouncing at the 50-neutral level, the RSI aimed higher but stalled at the 60 reading over the last two days.
For a bullish continuation, the GBP/JPY must clear 217.00. Once surpassed, the next stop would be a downslope resistance trendline at around the 217.20-30 range, followed by the 218.00 mark and the July 30 high at 218.69. Above the next stop would be 219.00.
On the downside, the first support for GBP/JPY would be the 216.00 psychological level. Below the next stop is the 50-day Simple Moving Average (SMA) at 215.68, followed by 215.00. A decisive push by the bears, opens the door to challenge the 100-day SMA at 214.93.
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.09% | 0.06% | 0.59% | 0.30% | 0.27% | 0.16% | |
| EUR | -0.13% | -0.01% | -0.02% | 0.49% | 0.20% | 0.22% | 0.05% | |
| GBP | -0.09% | 0.00% | 0.00% | 0.51% | 0.21% | 0.23% | 0.05% | |
| JPY | -0.06% | 0.02% | 0.00% | 0.56% | 0.15% | 0.21% | 0.05% | |
| CAD | -0.59% | -0.49% | -0.51% | -0.56% | -0.37% | -0.24% | -0.44% | |
| AUD | -0.30% | -0.20% | -0.21% | -0.15% | 0.37% | 0.03% | -0.14% | |
| NZD | -0.27% | -0.22% | -0.23% | -0.21% | 0.24% | -0.03% | -0.19% | |
| CHF | -0.16% | -0.05% | -0.05% | -0.05% | 0.44% | 0.14% | 0.19% |
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).
OCBC’s Sim Moh Siong and Christopher Wong note that South Korean Won (KRW) has extended its rally, with USD/KRW briefly touching 1380 on exporter and corporate US Dollar (USD) selling and a softer USD backdrop. While the domestic environment is constructive, with strong exports and a trade surplus, they warn that elevated Oil and US yields plus Bank of Korea (BoK) and Jackson Hole event risk could trigger near‑term consolidation.
USD/KRW support tested after sharp move
"KRW extended its rally into Friday, with USDKRW falling to low of 1380 at one point."
"Exporter and corporate USD selling, alongside the softer broader USD, appear to have provided the more consistent support, while foreign equity flows were mixed. The domestic backdrop also remains constructive, with exports up 56% YoY in the first 20 days of August on record semiconductor shipments and a sizeable trade surplus."
"After the sharp move, some consolidation would not be surprising, particularly with oil and US long-end yields still elevated."
"Attention this week turns to Jackson Hole, where any shift in Fed expectations or the USD could determine whether KRW extends its gains or pauses after the recent rally. Domestically, focus is on BoK MPC decision (Thu)."
"Mild bullish momentum faded while RSI Is near oversold conditions. Near term consolidation not ruled out. Support at 1380 (recent low), 1375 levels. Resistance at 1398 (76.4% fibo retracement of 2025 low to 2026 high), 1406 levels."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY trades near 159.00, nearly half the way back to its late-July peak.
- Japanese investors bought over 5 trillion Yen of foreign assets in two weeks.
- Tokyo core inflation is seen easing to 1.8%, thinning the September hike case.
Dollar-Yen holds near 159.00 into the North American afternoon, marginally higher on the day inside a range of roughly three quarters of a Yen between the 158.50 area and a high short of 159.50. Three weeks on from the largest single-session defence of the Yen on record, the pair has recovered close to half of what that operation delivered.
The scale of the effort is worth stating plainly, because the outcome has to be judged against it. A record 8.45 trillion Yen went out in one session, followed by roughly 5.3 trillion more in coordination with the US Treasury, and the pair fell from just under 164.00 to a little above the 155.00 handle. It has spent every week since walking back up.
The defence that funded the trade
The flow data explains why. Japanese investors net bought more than 5 trillion Yen of foreign equities and long-term bonds in the two weeks to August 15, against net selling of more than 300 billion Yen in the fortnight before. A cheaper Dollar was not read as a warning by the domestic institutional base. It was read as an entry.
That is the awkward arithmetic of a defence conducted without a policy change behind it. Official selling supplied a better level to whoever wanted the other side of the trade, and the people who wanted it were the same life insurers and pension funds the operation was nominally protecting. Reserves were converted into a discount on the carry trade.
One detail sharpens the point further. Reporting on the operation indicates the American leg was executed by selling Euros rather than Dollars, which left the Treasury market untouched at the very moment Washington was propping it up by other means. The Yen got its defence, and no American holding was liquidated to provide it.
The gap no ministry can sell its way out of
Nothing about the differential moved. The Bank of Japan (BoJ) holds its policy rate at 1.00% against a Federal Reserve target range of 3.50% to 3.75%, and the ten-year yield gap between the two markets runs near 1.8 percentage points with the American long end at multi-decade highs. Intervention changes the price for a session and leaves the reason for the flow entirely intact.
The energy leg pushes the same way. Japan imports effectively all of its fuel, Brent trades above $92.00, and Washington opened a global secondary-sanctions campaign against Iran's energy revenue on Monday while Tehran advanced plans to charge vessels for transiting the Strait of Hormuz. A country paying for its energy in Dollars has no interest in that argument running into the autumn, and its currency has less.
Which leaves the Yen dependent on a rate rise rather than a bigger cheque. Reporting through August has the Takaichi government supportive of a move in September or October, and that expectation is most of what has kept the pair from a straight retest of the level that triggered the defence.
Thursday is the test
Tokyo Consumer Price Index (CPI) figures for August land Thursday at 23:30 GMT and they point the wrong way. The measure excluding fresh food is seen at 1.8% YoY from 1.9%, with the headline and the series excluding food and energy both running near 2% and the July unemployment rate seen unchanged at 2.5%. Underlying inflation drifting back toward the target thins the case for a September increase rather than building it.
The American calendar supplies the rest. Core Personal Consumption Expenditures (PCE) prices arrive Wednesday at 12:30 GMT, seen at 0.2% MoM for July from 0.1% with the annual rate holding 3.3%, alongside the second look at Q2 Gross Domestic Product (GDP) at 1.5% annualised. The symposium at Jackson Hole runs Thursday through Saturday, and the Fed Chair's keynote on Friday at 14:00 GMT shares its hour with the preliminary benchmark revision to nonfarm payrolls.
Both halves of the week therefore lean the same direction for this pair. A soft Tokyo print and a chair unwilling to disown the December increase still in the curve is the combination that puts the intervention level back on the table, and there is nothing on the calendar between now and Friday capable of stopping it.
Levels to watch
Resistance: The 159.50 handle caps the session, then the 50-day Exponential Moving Average (EMA) near 160.00, which is also where intervention risk re-arms. Above that, the late-July peak just under 164.00.
Support: The 158.50 area is the first floor, then the 200-day EMA near 158.00 and rising into it. Beneath, 157.50 and then the August low just above the 155.00 handle.
Bias: Bullish while the 200-day EMA near 158.00 holds. The daily Stochastic Relative Strength Index (Stoch RSI) near 50 leaves plenty of room in either direction, and the structural case is unchanged as long as one central bank pays 1.00% and the other pays close to four times that. Invalidation on a daily close beneath the 200-day, which would need either a hawkish surprise from Tokyo or a second operation.
USD/JPY daily chart
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.
- EUR/USD slips after buyers fail to clear 1.1700 resistance.
- Bullish RSI keeps buyers in control, but consolidation looms.
- Break below 1.1650 exposes 200-day SMA and 1.1600.
The shared currency registers minimal losses of 0.13% versus the US Dollar as EUR/USD fails to surpass 1.1700, exacerbating the drop towards the 1.1660 area, despite retaining its current neutral-to-upward bias.
EUR/USD Price Forecast: Technical Outlook
The EUR/USD is poised to consolidate further, as price action has failed to extend the market structure of higher highs and higher lows. Momentum shifted bullish, as the Relative Strength Index (RSI) shifted overbought, an indication that bulls are in charge.
However, the path of least resistance for EUR/USD is for it to continue trading sideways.
For a bullish resumption, the first resistance for EUR/USD is 1.1700. A breach of the latter will expose the 1.1750 psychological level, followed by the May 6 high at 1.1795, ahead of 1.1800. On further strength, the next stop is the April 17 swing high of 1.1849.
On the downside, if EUR/USD dives below 1.1650, the next area of interest would become the 200-day Simple Moving Average (SMA) at 1.1631. Below this level lies the 1.1600 mark, followed by the 100-day SMA at 1.1574 and by 1.1500.
EUR/USD Price Chart – Daily
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.07% | 0.08% | 0.57% | 0.29% | 0.32% | 0.17% | |
| EUR | -0.13% | -0.03% | -0.02% | 0.43% | 0.21% | 0.25% | 0.06% | |
| GBP | -0.07% | 0.03% | 0.00% | 0.49% | 0.21% | 0.30% | 0.06% | |
| JPY | -0.08% | 0.02% | 0.00% | 0.54% | 0.13% | 0.24% | 0.06% | |
| CAD | -0.57% | -0.43% | -0.49% | -0.54% | -0.36% | -0.19% | -0.42% | |
| AUD | -0.29% | -0.21% | -0.21% | -0.13% | 0.36% | 0.08% | -0.13% | |
| NZD | -0.32% | -0.25% | -0.30% | -0.24% | 0.19% | -0.08% | -0.23% | |
| CHF | -0.17% | -0.06% | -0.06% | -0.06% | 0.42% | 0.13% | 0.23% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (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.
