Forex News
MUFG’s Derek Halpenny highlights growing downside risks for the Japanese Yen as rising US yields and higher Fed hike probabilities support the Dollar. He notes that past Japanese intervention relied on falling US yields, but this time yields are climbing and external conditions are more challenging. MUFG expects further intervention and a more hawkish BoJ tone, yet doubts this will significantly lift JPY.
Intervention pressure and BoJ hawkish tilt
"Since the start of last week, the 10-year UST bond yield has jumped 30bps as investors reassess inflation risks and the potential scale of Fed response. Over that period the implied probability of a 25bp rate hike by year-end has gone from zero to around 80%. The US dollar is responding and the DXY index is 1.5% stronger – the biggest move since the initial period following the start of the US-Iran conflict. There is scope for yields to move further higher."
"In previous interventions that happened – in 2022 and July 2024 US yields fell notably in the weeks following intervention and USD/JPY fell sharply. In April/May 2024 that didn’t happen and yields remained stable at elevated levels and intervention failed. This time, the external backdrop is even more challenging – US yields are rising sharply and in these circumstances the need for additional intervention is increasing by the day."
"The BoJ is likely coming under increased US pressure to hike rates, and we suspect Ueda’s tone is set to turn hawkish ahead of the next BoJ meeting on 16th June. Yesterday he stated that “the pace of businesses passing on their costs is somewhat fast”. More comments like that and expectations of a June hike will increase further."
"But the pricing for a hike is already showing an 80% probability, so it’s unlikely that a more hawkish BoJ at this stage will be enough to lift the yen. Signals of more hiking to do beyond June would help but that seems unlikely and hence developments in the Middle East, energy markets and US yields will remain key. Additional intervention looks like it may be needed even with the BoJ turning more hawkish."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Here is what you need to know on Wednesday, May 20:
The US Dollar (USD) preserves its strength early Wednesday after outperforming its major rivals on Tuesday. Later in the American session, the US Treasury will hold a 20-year note auction and the Federal Reserve (Fed) will publish the minutes of the April policy meeting.
The USD benefited from surging US Treasury bond yields on Tuesday as investors now expect a strong chance of the Federal Reserve tightening the policy to control inflation. After rising nearly 0.4% on Tuesday and touching its highest level since early April, the USD Index clings to modest daily gains at around 99.40 in the European morning on Wednesday. According to the CME FedWatch Tool, markets are currently pricing in a nearly 60% probability of the Fed raising the policy rate by 25 basis points at least once by the end of the year.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | -0.49% | 0.17% | 0.15% | 0.61% | 0.19% | 0.49% | |
| EUR | -0.25% | -0.76% | 0.00% | -0.11% | 0.34% | 0.00% | 0.21% | |
| GBP | 0.49% | 0.76% | 0.70% | 0.66% | 1.11% | 0.77% | 0.95% | |
| JPY | -0.17% | 0.00% | -0.70% | -0.08% | 0.36% | -0.05% | 0.26% | |
| CAD | -0.15% | 0.11% | -0.66% | 0.08% | 0.45% | 0.03% | 0.28% | |
| AUD | -0.61% | -0.34% | -1.11% | -0.36% | -0.45% | -0.34% | -0.06% | |
| NZD | -0.19% | -0.00% | -0.77% | 0.05% | -0.03% | 0.34% | 0.19% | |
| CHF | -0.49% | -0.21% | -0.95% | -0.26% | -0.28% | 0.06% | -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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
US Vice President JD Vance said on Tuesday that President Donald Trump is still pursuing a diplomatic solution to the conflict with Iran but added that they remain "locked and loaded" to restart the military campain if nuclear talks fail. Meanwhile, Iran’s Foreign Minister Abbas Araghchi said Tehran has gained military knowledge from previous hostilities and warned that "a return to war will feature many more surprises."
The UK's Office for National Statistics reported on Wednesday that annual inflation, as measured by the change in the Consumer Price Index (CPI), declined to 2.8% in April from 3.3% in March. This print came in below the market expectation of 3%. Other details of the report showed that the Producer Price Index (PPI) - Input, rose 7.7% on a yearly basis, up sharply from the 5.3% increase recorded in March. GBP/USD struggles to find direction following these data and fluctuates in a narrow channel below 1.3400.
Gold (XAU/USD) came under heavy bearish pressure following Monday's indecisive action and lost nearly 2% on Tuesday. XAU/USD extended its slide in the early trading hours of the Asian session and touched its lowest level since late March near $4,450 before recovering above $4,470 by the European morning.
EUR/USD struggles to stage a rebound and trades below 1.1600 early Wednesday after losing about 0.4% on Tuesday.
USD/JPY stays in a consolidation phase at around 159.00 after posting gains for the seventh consecutive trading day on Tuesday. Japanese Prime Minister Sanae Takaichi said on Wednesday that the government is not at the stage to comment on the scale of the extra budget, adding that it's possible the extra budget is aimed mainly at responding to the Middle East situation.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- USD/JPY remains close to 159.00 near immediate barrier of upper boundary of the descending channel.
- The 14-day Relative Strength Index around 55 shows buyers hold a slight edge without being overbought.
- The initial support lies at the nine-day EMA of 158.43.
USD/JPY halts its seven-day winning streak, trading around 159.00 during the European hours on Wednesday. The currency pair holds above the nine- and 50-period Exponential Moving Averages (EMAs), keeping a constructive upside bias in place after recovering from last week’s dip.
Additionally, the 14-day Relative Strength Index (RSI) sits around 55, hinting at moderate bullish momentum rather than overbought conditions as price consolidates just under the recent highs.
On the daily chart, technical analysis indicates that the pair is positioned slightly below the upper boundary, make-or-break" zone, of the descending channel pattern. A sustained break above the channel would confirm the bullish reversal, while a failure may lead to the sideways trend.
Further advances above the channel would support the USD/JPY pair to explore the region around the 22-month high of 160.73, which was recorded on April 30, followed by the all-time high of 162.00, recorded in July 2024.
On the downside, the USD/JPY pair may fall toward the primary support at the nine-day EMA of 158.43, followed by the 50-day EMA at 158.21. A break below these averages would revive the bearish bias and put downward pressure on the pair to navigate the region around the 12-week low of 155.04, recorded on May 6, followed by the lower boundary of the descending channel around 154.00.
(The technical analysis of this story was written with the help of an AI tool.)
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 | 0.10% | 0.05% | -0.02% | 0.19% | -0.02% | -0.03% | 0.18% | |
| EUR | -0.10% | -0.05% | -0.13% | 0.09% | -0.13% | -0.11% | 0.08% | |
| GBP | -0.05% | 0.05% | -0.09% | 0.15% | -0.09% | -0.07% | 0.12% | |
| JPY | 0.02% | 0.13% | 0.09% | 0.23% | 0.02% | 0.02% | 0.22% | |
| CAD | -0.19% | -0.09% | -0.15% | -0.23% | -0.21% | -0.17% | -0.01% | |
| AUD | 0.02% | 0.13% | 0.09% | -0.02% | 0.21% | 0.01% | 0.19% | |
| NZD | 0.03% | 0.11% | 0.07% | -0.02% | 0.17% | -0.01% | 0.19% | |
| CHF | -0.18% | -0.08% | -0.12% | -0.22% | 0.01% | -0.19% | -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).
European Central Bank policymaker and Bank of France nominee Emmanuel Moulin said during the European trading session on Wednesday that it is too soon to say whether the central bank will make any monetary policy adjustment in the June policy meeting. Moulin added that the central bank “needs to pay close attention to inflation”.
Market reaction
No reaction from the Euro (EUR) after ECB nominee Moulin's comments. As of writing, EUR/USD trades 0.1% lower at around 1.1595.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Commerzbank’s Michael Pfister notes that Canadian inflation surprised to downside on core measures, staying near 2%, helped by Canada’s status as a net energy exporter and a weak labour market. He questions market expectations for two Bank of Canada (BoC) hikes by year-end. Pfister sees CAD supported if Iran tensions ease and Canada’s real economy recovers later in year, allowing a possible December hike.
Soft core inflation tempers BoC expectations
"The April inflation figures released in Canada yesterday came in well below expectations. Although the year-on-year headline rate increased from 2.4% to 2.8%, this was still lower than the 3.1% anticipated by the market. As expected, the increase is almost entirely due to rising gasoline prices."
"We therefore continue to have our doubts about market expectations of two interest rate hikes by the Bank of Canada by the end of the year. For the CAD, however, this does not necessarily have to be a bad thing. If the conflict in Iran were to end permanently, many market expectations regarding interest rate hikes would likely no longer be sustainable."
"Then, relatively speaking, performance would likely shift to the CAD’s favour. If the Canadian real economy were to recover in the second half of the year, the Bank of Canada could raise rates in December. But it would be for different reasons than the market currently anticipates."
"It will nevertheless take some time for this view to gain traction. Fortunately, the CAD is currently benefiting from its independence from energy imports."
"Many countries are currently debating the sustainability of the recent energy price shock and the responses of central banks. In Canada, however, this is likely to be a much smaller problem. This is certainly due to the fact that Canada is a net energy exporter."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Deutsche Bank analysts highlight a sharp selloff in US Treasuries, with 30‑year yields reaching post‑2007 highs and 10‑year yields at their highest since early 2025. Rising real yields and higher Fed hike probabilities underpin the move, while they warn that renewed strikes on Iran could reignite bond market fears reminiscent of April 2025.
Curve records and geopolitical risk
"Back to bonds and this upward pressure on yields was clear around the world yesterday, but it was US Treasury yields that saw the biggest jump, with new records across the curve."
"Most significantly, the 30yr yield (+5.8bps) hit a post-2007 high of 5.18%, whilst the 30yr real yield (+4.0bps) hit a post-2008 high of 2.86%."
"For shorter maturities, the records weren’t quite so big, but the 10yr yield (+7.9bps) still rose to 4.67%, the highest since January 2025."
"And with investors bringing forward their rate hike expectations, the 2yr yield (+7.4bps) also hit its highest since February 2025, at 4.12%."
"The worrying thing would be that with this base in yields formed, where would yields go if strikes resumed on Iran?"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CHF gains positive traction for the second straight day amid the prevailing USD buying interest.
- Geopolitical uncertainties and rising bets for a rate hike by the Fed lift the USD to a six-week high.
- The mixed technical setup warrants some caution before positioning for any further appreciation.
The USD/CHF pair attracts some follow-through buyers for the second straight day and retests the three-week top during the early European session on Wednesday. Spot prices now look to build on over one-week-old uptrend further beyond the 0.7900 mark amid a bullish US Dollar (USD).
Persistent geopolitical uncertainties, along with hawkish US Federal Reserve (Fed) expectations amid inflation fears, helps the USD Index (DXY), which tracks the Greenback against a basket of currencies, in preserving its recent gains to a six-week high. Bulls, however, seem hesitant and opt to wait for the release of FOMC Minutes before positioning for any further appreciating move.
From a technical perspective, the Moving Average Convergence Divergence (MACD) histogram has turned modestly positive and backs the constructive outlook. However, spot prices location below the 200-day Exponential Moving Average (EMA) and a mid-range Relative Strength Index (RSI) around 58 suggest only tentative upside momentum within a broader capped environment.
Hence, any subsequent move up beyond the 50% Fibonacci retracement level of the March-May fall is likely to confront near a dense overhead cluster that starts with the 0.7915-0.7920 horizontal zone and the 61.8% Fibo. at 0.7936. This is followed by the 200-day EMA near 0.7956 and then the 78.6% retracement at 0.7984, with the swing high of 0.8045 acting as a stronger barrier if gains extend.
On the downside, initial support sits at the 50.0% retracement around 0.7902, ahead of the 38.2% retracement at 0.7868, with further floors at the 23.6% Fibo. near 0.7827 and the 0.7759 anchor, where a deeper pullback could seek a more solid base.
(The technical analysis of this story was written with the help of an AI tool.)
USD/CHF daily chart
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Next release: Wed May 20, 2026 18:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
- The Oil price corrects to near $101.80, while its outlook remains broadly firm.
- US President Trump delivers fresh threats of military attacks on Iran.
- The Fed will likely deliver at least one interest rate hike this year.
West Texas Intermediate (WTI), futures on NYMEX, trade almost 1.5% lower to near $101.80 during the European trading session on Wednesday. The Oil price drops despite uncertainty surrounding the reopening of the Strait of Hormuz - a critical passage to almost 20% of global energy flows - remains intact.
On Tuesday, a spokesperson from Qatar’s Foreign Ministry said that communication between leaders in the region is ongoing and with conflict parties to prevent a return to escalation, while warning that normal traffic on Hormuz has not resumed yet.
Meanwhile, the negotiations deadlock between the United States (US) and Iran doesn’t appear to be resolving soon, following fresh military threats from Washington. US President Donald Trump said on Tuesday that Washington may have to give Iran another big hit in the coming few days, if it doesn’t agree to a deal, Bloomberg reported.
Going forward, the Oil price’s upside could be restricted by growing expectations that the Federal Reserve (Fed) will raise borrowing rates this year. According to the CME FedWatch tool, the odds of the Fed delivering at least one interest rate hike this year is 56.3%, a significant turnaround from two interest rate cuts anticipated before the onset of the Middle East war.
WTI technical analysis
WTI US Oil trades lower at around $101.80 at the press time. However, the oil price maintains a bullish near-term bias as it holds above the 20-day Exponential Moving Average (EMA) at roughly $98. The price action staying comfortably over this dynamic support suggests that pullbacks are being bought, while the Relative Strength Index (RSI) around 57 keeps a constructive, yet not overbought, momentum backdrop.
On the downside, initial support is seen at the 20-day EMA near $98, where a break would hint at a deeper correction toward $90.00. As long as WTI holds above this moving average and momentum remains positive, the path of least resistance stays higher, with the market likely to treat dips as opportunities rather than signaling a clear top. Looking up, the oil price aims to revisit an over two-month high of $107.35.
(The technical analysis of this story was written with the help of an AI tool.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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