Forex News

• USD/JPY has round-tripped close to three Yen between 158.00 and 161.00.
• The US Treasury warned banks through the New York Fed to stand ready Friday.
• Three consecutive days count as one operation, so Friday costs Tokyo nothing.

Thursday's record Yen defence is the story everyone has written. Friday is the one that matters, because the Dollar has been sold in three separate lurches since the Tokyo morning, nobody has claimed any of them, and the US Treasury has told a number of banks through the New York Fed that it may enter the market and they should stand ready for further action. USD/JPY trades just under 159.00 late in the session, a Yen and a half beneath where the day began.

The second round is the cheap one

The pattern reads like an operation rather than a market. The London morning took the Dollar down to the 158.50 area in minutes and it was bought straight back; a second lurch landed around 13:15 GMT as the Treasury headline crossed; the session low near 158.00 printed hours later in the New York afternoon. Desks could not separate an operation from a liquidation.

That confusion is not a communication failure. It is the product. Having spent a record sum on Thursday to break the book, Tokyo can now hold the level with a fraction of the money, or with none at all, because every air pocket is deniable and traders have to price the possibility rather than the fact.

Three days count as one

International Monetary Fund (IMF) guidelines treat up to three episodes of intervention in six months as consistent with a free-floating exchange rate, and three consecutive days of operations count as a single episode. Finance ministry officials said in May that two windows remained before November once the April campaign was counted. Thursday and Friday are the second, and they are the same one, which means today's activity is free on the only meter Tokyo is watching.

Reserves are not the binding constraint either. Japan holds roughly 1.4 trillion Dollars, a little under 1.2 trillion of that in foreign currency assets, and the April to May campaign ran about 74 billion Dollars across a month without denting the pile. What is scarce is the permission rather than the ammunition, and one window is left.

The desk is American, the policy is not

The rate check that preceded Thursday's move came from the Federal Reserve Bank of New York acting as fiscal agent for the Treasury, not from the Federal Reserve on its own account. Participation by the central bank itself would require separate authorization from the Federal Open Market Committee (FOMC), and none has been granted. The coordination running through this episode is fiscal, and it stops at the border of the interest rate that created the problem.

The gesture is still the largest in fifteen years. The Treasury Secretary called the Yen badly undervalued on Thursday and said currency markets tend to overshoot, and the last direct American operation in this pair was March 2011, one billion Dollars split between the Exchange Stabilization Fund (ESF) and the central bank's own portfolio, aimed at weakening the currency rather than supporting it.

Scale is what keeps the enthusiasm in proportion. The ESF's net position at the end of 2025 was 43.6 billion Dollars, less than Tokyo spent in an hour on Thursday. American money is a signal, and the signal is the point.

What Thursday actually bought

The operation itself is estimated near 53 billion Dollars from central bank account data, which would make it the largest single day Tokyo has ever run. It took the Dollar from the 163.00 handle to just under 158.00 inside an hour, sixty minutes after a Gross Domestic Product (GDP) print of 1.5% annualised against a 2.1% consensus had knocked it off balance, into a book carrying net short Yen positions worth 11.65 billion Dollars.

Twelve hours later the Bank of Japan (BoJ) held at 1.00% on an 8-1 vote, one member preferring a quarter point more, while warning that underlying inflation could run above target. A 3.75% upper bound in Washington against 1.00% in Tokyo, a war that keeps Japan's energy import bill denominated in Dollars, and a government elected on spending, together make a machine that manufactures Yen sellers faster than any operation can retire them.

The week that decides it

Monday brings the first hard read on Thursday's size when the operation clears into central bank account data, alongside the manufacturing survey at 14:00 GMT with a consensus of 54. Wednesday carries private payrolls at 75K from 98K. Confirmation from the finance ministry itself does not arrive until its monthly figure late in August, which is exactly why the ambiguity is worth more to Tokyo than the reserves are.

Friday 7 August at 12:30 GMT is the release that matters. Nonfarm payrolls are seen at 91K against 57K prior, unemployment at 4.3% from 4.2% and average hourly earnings at 0.3% MoM. There is no FOMC meeting in August, so two payroll reports land before 16 September, where futures still price at least one increase at roughly 59%.

Levels and bias

Resistance: The 50-day Exponential Moving Average (EMA) just under 161.50 capped Friday's rebound near 161.00 and stands as the first line. Above it sit 163.00 and the four-decade high short of 164.00.

Support: The 200-day EMA near 158.00 has been tested twice in two sessions, by Thursday's flush just beneath it and by Friday's low just above. Under that lie the 155.00 area and the year's base near 152.00.

Bias: Bearish while the 50-day EMA caps rallies and an unnamed bidder with an American co-signer is live in the market. A daily close beneath 158.00 opens the 155.00 area. A daily close back above 161.50 invalidates the call and says the market has counted Tokyo's remaining windows and found them wanting.

USD/JPY 5-minute chart

USD/JPY daily chart

• The US Dollar Index struggles near six-week lows as suspected Japanese intervention weighs on sentiment.
• Analysts see the Greenback's rally losing momentum after the latest Federal Reserve monetary policy meeting.
• Traders await next week’s ISM PMIs and Nonfarm Payrolls data.

The US Dollar Index (DXY) struggles to hold its early recovery on Friday as the fallout from suspected Japanese intervention and the possibility of direct action by the United States (US) keep the Greenback under pressure.

At the time of writing, the index trades around 99.96, easing from an intraday high of 100.45 and hovering near its lowest level in six weeks. The DXY is also on track to close July in negative territory.

The Greenback suffered a sharp sell-off on Thursday as the Japanese Yen (JPY) surged across the board. Reuters reported, citing a market source, that Japanese authorities likely conducted a large-scale US Dollar-selling, Yen-buying intervention during American trading hours.

Intervention concerns intensified on Friday after Reuters reported that the US Treasury had informed several banks that it may intervene in the Yen market and advised them to “stand ready for future action.”

Meanwhile, the Federal Reserve’s (Fed) shift towards limited forward guidance is also weighing on the US Dollar. Analysts at Brown Brothers Harriman argue that “the USD rally from May has run its course, with DXY poised to retreat back into a 96-100 range.”

They warn that “the tailwind to USD from resilient US economic activity is outweighed by Fed Chair Kevin Warsh's failure to turn tough inflation rhetoric into a credible policy, increasing the risk the Fed falls behind the curve in containing inflation.”

The US central bank left interest rates unchanged at 3.50%-3.75% on Wednesday. Dallas Fed President Lorie Logan, who voted for a rate hike at this week’s meeting, said on Friday, “Without any policy restraint, inflation will likely continue to trend above target until there’s an unanticipated shock.”

On the data front, the final University of Michigan Consumer Sentiment Index rose to 55.2 in July from 54.4, while the Consumer Expectations Index improved to 55.4 from 54. Meanwhile, one-year and five-year consumer inflation expectations were unchanged at 4.2% and 3.3%, respectively.

Looking ahead, next week’s US economic calendar features the July ISM Manufacturing and Services Purchasing Managers Index (PMIs), followed by the Nonfarm Payrolls (NFP) report. The US economy is expected to add 91K jobs in July, up from 57K in June, while the Unemployment Rate is forecast to rise to 4.3% from 4.2%.

Richmond Federal Reserve (Fed) President Tom Barkin said on Friday that it remains uncertain whether the current level of interest rates is sufficiently restrictive to bring inflation back to the Fed's 2% target, according to an interview with The Wall Street Journal.

Barkin also said he was unsure whether he would have joined the three Fed committee members who dissented in favor of a 25 basis-point rate increase at this week's policy meeting. His comments come after the Fed left interest rates unchanged, while Governors Lorie Logan, Beth Hammack and Neel Kashkari favored an immediate hike.

Key quotes

It's a close call whether interest rates are high enough.

I don't know whether I would have joined the three colleagues who dissented in favor of a rate increase.

I'm skeptical that the labor market has strengthened meaningfully.

Price increases are moving through the economy unevenly."

• EUR/USD trades around 1.1530 after recovering from an early intraday sell-off.
• Eurozone HICP inflation increased to 2.9% YoY in July, while Core HICP accelerated to 2.5%.
• Dallas Fed President Lorie Logan said she would have preferred a 25-basis-point rate hike, supporting the US Dollar.

EUR/USD trades near the 1.1530 area during Friday's American session, consolidating after a strong rally off intraday lows. The Euro found support from resilient Eurozone inflation data, although gains remain capped as hawkish Federal Reserve (Fed) rhetoric boosts the US Dollar.

Preliminary data from Eurostat showed that the Eurozone Harmonized Index of Consumer Prices (HICP) rose 2.9% YoY in July, up from June's 2.8% reading. Meanwhile, core HICP accelerated to 2.5% YoY, above both the previous 2.4% and economists' forecasts, suggesting underlying price pressure remains persistent. On a monthly basis, headline HICP increased 0.2%, while core HICP was unchanged.

Labor market figures were more mixed. Germany's unemployment rate edged higher to 6.4% in June from 6.3%, while the number of unemployed increased by 6,000, slightly above expectations, pointing to some moderation in labor market conditions.

The US Dollar, however, continues to draw support from renewed hawkish comments by Dallas Fed President Lorie Logan. Logan said monetary policy is not restraining the economy and argued that inflation is not on course to return to the Federal Reserve's 2% objective.

Short-term technical analysis:

On the 4-hour chart, EUR/USD trades at 1.1531. The pair holds a bullish near-term bias as it trades above both the 20-period and 100-period Simple Moving Averages (SMAs), with the short-term SMA rising and comfortably stacked over the longer one, suggesting an ongoing constructive trend. The Relative Strength Index (RSI) around 67 hovers in overbought territory, hinting that upside momentum remains firm, even if the risk of a brief pause or shallow pullback is growing.

On the downside, initial support is seen at 1.1526, backed by nearby horizontal levels at 1.1518 and 1.1513 that collectively form a tight demand band just under spot. A deeper retracement would expose 1.1485, ahead of the 20-period SMA near 1.1457 and the 100-period SMA around 1.1423, where the broader bullish structure would be expected to attract dip-buying interest as long as these moving averages hold.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• Silver falls as rising US Treasury yields offset support from a weaker US Dollar.
• Hawkish Federal Reserve expectations continue to weigh on non-yielding metals.
• Technically, XAG/USD consolidates above the $55 support zone while holding below key moving averages.

Silver (XAG/USD) trades on the back foot on Friday as rising US Treasury yields outweigh support from a weaker US Dollar (USD). At the time of writing, XAG/USD trades around $57.50, down 2% on the day and on track to close July in negative territory.

The US Dollar stays under pressure following suspected intervention by Japanese authorities to support the Japanese Yen (JPY). The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, hovers around 100, near six-week lows.

Meanwhile, US Treasury yields move higher as elevated energy prices keep inflation risks tilted to the upside, reinforcing expectations that the Federal Reserve (Fed) may maintain tighter monetary policy or raise interest rates later this year. Hawkish Fed expectations weigh on non-yielding metals such as Silver, as higher borrowing costs increase the appeal of interest-bearing assets.

While macroeconomic headwinds persist, the technical outlook points to signs of near-term stabilization within the broader bearish structure.

On the daily chart, XAG/USD is consolidating above the $55 support area. However, the broader structure stays bearish as Silver trades below the 21-day, 50-day and 100-day Simple Moving Averages (SMAs).

The Relative Strength Index (RSI) near 44 sits below the neutral 50 level, pointing to subdued buying pressure. Meanwhile, the positive Moving Average Convergence Divergence (MACD) reading suggests that downside momentum is easing.

On the upside, initial resistance is seen at the 21-day SMA near $58.50. A daily close above this level could support a recovery towards the 50-day SMA at $63, followed by the 100-day SMA near $70.

On the downside, immediate support is seen at the horizontal level around $55, with a deeper floor near $45 if selling resumes, keeping the metal vulnerable while it trades beneath its key moving averages.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• DJIA trades near 52,500 after a 600-point round trip off the 52,000 handle.
• Apple down 10%, Amazon up 15%, both inside the index.
• The 30-year yield holds 2007 highs into a payrolls week.

The Dow Jones Industrial Average (DJIA) trades just beneath 52,500 on Friday, up around 230 points and roughly 1.6% under the record set early in July. That mild figure covers a session that ran close to 600 points, from a high in the 52,600 area down to a low fractionally beneath the 52,000 handle, before recovering more than 450 points inside two hours. No new information arrived between those two extremes.

Two earnings shocks, one index, almost no net

Apple (AAPL) trades around 10% lower after a fiscal third quarter in which revenue beat expectations on a 22% jump in iPhone sales, only for a shortfall in services to take the shares down anyway. Amazon (AMZN) trades over 15% higher on a second-quarter revenue beat carried by its cloud business, read as confirmation that the capital-spending cycle behind the technology trade is intact. Both names sit inside these thirty.

The index is price weighted, so a component contributes Dollars of share-price movement rather than percentage points of market value. Two names trading in a broadly similar price band, moving roughly the same distance in opposite directions, therefore subtract and add close to the same number of index points. The largest single-name earnings dispersion of the quarter nets out to a gain of less than half a percent.

The structure blamed all summer for this index lagging the technology trade is the same structure that neutralised the biggest earnings shock of the week. Five of the seven largest technology names now sit inside the average, Meta Platforms (META) and Tesla (TSLA) the absentees, so the gap between the benchmarks is weighting method and breadth rather than membership.

The long end declines to ratify it

The 30-year Treasury yield holds near its highest level since 2007 and extended again through Friday, while the 10-year sits above 4.7% and its own highest since January 2025. Both moves happened with equities bid. Two days after a fifth consecutive hold, decided nine to three with three regional presidents dissenting for a quarter-point increase, the long end is still selling.

The dissent is the tell, because a committee that will not move ahead of the data leaves the inflation risk sitting with whoever owns the bonds. The chair conceded this week that the central bank has no instant remedy for five years of above-target prices, and long-dated investors took the admission at face value and repriced thirty-year money accordingly.

A long bond at levels last seen before the financial crisis is a statement about the price of money over decades, not a verdict on next quarter's earnings. An equity index within a couple of percent of its record and a curve pricing tightening describe two different economies, and the war that keeps Crude Oil bid reconciles them in the bond market's favour.

Every American print landed on the hawkish side

The Employment Cost Index (ECI) for the second quarter, out at 12:30 GMT, rose 0.9% against a 0.8% consensus and matched the prior quarter. That is the cleanest quarterly read on labour costs the Federal Reserve gets, and it beat. The Chicago Purchasing Managers Index (PMI) at 13:45 GMT followed with 57.6 against 56, up from 56.7.

University of Michigan (UoM) sentiment then printed 55.2 against a 54 consensus at 14:00 GMT, with the expectations index at 55.4 against the same 54, and that beat is what carried the headlines. The inflation components did not move at all. One-year expectations held at 4.2% and the five-year at 3.3%, both in line and both unchanged on the month.

Sentiment improving while inflation expectations stay pinned is not the disinflation story it was reported as, and the tape worked that out. A regional Fed president who dissented for a quarter-point increase on Wednesday spoke into the same 14:00 GMT block, scoring hawkish well above the speaker's own running average, and the session low printed inside the following quarter hour.

A payrolls week follows

The Institute for Supply Management (ISM) manufacturing survey opens Monday at 14:00 GMT with a 54 consensus from 53.3, and its prices-paid component is seen easing to 70 from 73. The services survey lands Wednesday at 14:00 GMT at 54.2 from 54. Given where the long end is trading, the prices-paid readings matter more than either headline.

The private payrolls estimate arrives Wednesday at 12:15 GMT with a 75K consensus from 98K, and preliminary second-quarter productivity and unit labour costs follow on Thursday. Those two re-test from the output side the same wage question the Employment Cost Index raised on Friday.

Nonfarm payrolls land Friday 7 August at 12:30 GMT with a 91K consensus after June's 57K, the unemployment rate seen ticking up to 4.3% from 4.2%, and average hourly earnings at 0.3% MoM and 3.5% YoY. There is no meeting in August, so two payroll reports arrive before the 16 September decision. A soft number does not buy relief here, because the front end is pricing the next move as an increase.

Levels and bias

Resistance: The session high in the 52,600 area is the first ceiling, and it is the same shelf that capped the tape through late July. Above it the record just over 53,300 is the only mark left on the chart.

Support: The 52,000 handle held on the flush and is now the line that matters, with 51,800 beneath it and the 50-day Exponential Moving Average (EMA) near 51,600 rising into the price.

Bias: Bullish while the 52,000 handle holds. The daily Stochastic Relative Strength Index (Stoch RSI) near 21 is oversold and turning up off Wednesday's flush, the 5-minute reading above 90 argues the immediate bounce is stretched, and a daily close beneath 52,000 invalidates and exposes the 50-day EMA.

Dow Jones daily chart

• WTI Oil gains 0.76% on Friday, trading around $83.30 after rebounding from an intraday low below $80.00.
• A partial recovery in shipping traffic through the Strait of Hormuz has eased some supply concerns, but ongoing Middle East tensions continue to support Oil prices.
• Markets are now focused on this weekend's OPEC+ meeting, with production plans remaining closely tied to export conditions in the Gulf.

West Texas Intermediate (WTI) US Oil trades higher on Friday, rising 0.76% to around $83.30 after staging a sharp rebound from an intraday low below $80.00. The Crude Oil has erased some of its weekly losses and is on track to finish the week close to its opening levels after the bearish gap seen at the start of the week.

Market sentiment has improved as investors reassess the impact of shipping disruptions through the Strait of Hormuz. According to CommBank, Oil tanker traffic through the strategic waterway has recovered to around 30%-35% of its pre-conflict level. A broader normalization of flows could ease pressure on global supply, explaining part of the heightened volatility seen in recent days.

However, geopolitical risks continue to provide strong support for Oil prices. Ongoing tensions between Iran and the United States (US) remain a major source of uncertainty, while threats to energy infrastructure and key shipping routes continue to maintain a geopolitical risk premium in the market.

Fundamentals also remain supportive. The latest data from the US Energy Information Administration (EIA) showed a larger-than-expected decline in US Crude Oil inventories, highlighting a still-tight market and relatively low stock levels.

Meanwhile, investors are awaiting this weekend's Organization of the Petroleum Exporting Countries and allies (OPEC+) meeting. Several analysts expect the group to approve a modest increase in September production targets, although they stress that the implementation of these supply increases will largely depend on the Strait of Hormuz remaining open and Gulf producers being able to fully restore export flows.

Middle East tensions and constrained flows keep Crude market tight

According to TD Securities, the “supply situation [is] remaining constrained in energy markets,” with flows via “Hormuz, Bab el-Mandeb and Russia all remain materially constrained, with global seaborne exports again sitting near the lowest levels since the war began.” The bank argues that this “reduced flows and global tightening of the energy market” is “supportive of further upside in Crude Oil,” even as positioning remains mixed across the complex. TD notes that “CTAs are quiet in Crude today, but could turn modest buyers of Brent crude above $91.60/bbl,” adding that “CTAs could turn buyers of Brent Crude Oil, but are sellers of gasoline on the day,” with “CTAs…selling RBOB gasoline on the day.”

Commerzbank likewise stresses that “it remains clear that the regional escalation of the Middle East conflict puts additional pressure on the global oil market,” and warns that developments in the region are “likely to remain a key driver of commodity market sentiment and oil prices in the weeks ahead.” In its view, “given this situation and the absence of clear de-escalation signals, Oil prices are likely to remain elevated for the time being,” though it cautions that “recent weeks have demonstrated that even tentative progress in US-Iran relations can exert substantial downward pressure on prices.”

On the supply side, Commerzbank highlights fresh OPEC headlines, noting that “this Sunday, the seven core OPEC+ countries will meet and are expected to raise the production targets for September once again by around 188,000 barrels per day, before likely pausing further increases.” However, it underscores that “the implementation of previously announced production hikes ultimately depends on the Strait of Hormuz remaining open and Gulf producers being able to restore export flows.” At the same time, the bank points out that “this underlines the increasingly tight inventory situation in the US, which is likely to limit the scope for crude oil exports,” reinforcing the broader narrative of a tightening global market.

• AUD/USD trades near 0.7020 after retreating from fresh multi-week highs around 0.7045.
• China's official Manufacturing and Non-Manufacturing PMIs missed expectations, weighing on the China-sensitive Australian Dollar.
• Dallas Fed President Logan reiterated that inflation remains above target.

AUD/USD trades around the 0.7020 area during Friday's American session. The pair remains under mild pressure as disappointing Chinese business activity data offsets stronger Australian inflation expectations, while renewed hawkish comments from Federal Reserve (Fed) officials provide fresh support for the US Dollar.

China's National Bureau of Statistics reported that the Manufacturing PMI fell to 49.2 in July from 50.3 previously, well below the 50.0 consensus and back into contraction territory. Meanwhile, the Non-Manufacturing PMI eased to 49.0 from 50.2, also missing expectations. The weaker readings reinforced concerns over slowing demand in Australia's largest trading partner, limiting demand for the Australian Dollar.

On the domestic front, Australia's Producer Price Index (PPI) accelerated to 3.6% YoY in the second quarter from 3.0% previously, suggesting pipeline inflation pressure remains elevated. However, the stronger inflation reading was insufficient to offset the negative impact from China and the stronger US Dollar.

The Greenback also found support after Dallas Fed President Lorie Logan struck a notably hawkish tone. Logan said monetary policy is not restraining the economy, warned that inflation is not on track to return to the Fed's 2% target, and argued that risks to inflation remain skewed to the upside. She added that she would have preferred a 25-basis-point rate increase, noting that modest tightening now could reduce the need for more aggressive action later.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7025, holding a mild bullish bias as it pivots around horizontal support at this same level while remaining above the 20-period and 100-period Simple Moving Averages (SMAs) clustered just under 0.7000. This positioning suggests buyers retain control in the near term, and the Relative Strength Index (RSI) near 63 points to firm but not extreme upside momentum, indicating that any dips toward the underlying averages could attract renewed demand.

On the topside, initial resistance emerges at 0.7039, with a subsequent barrier at 0.7045, where a break would open the door to a more sustained advance. On the downside, immediate support is defined by the 0.7025 pivot, followed by a horizontal floor at 0.6992, while the 20-period SMA around 0.6982 and the 100-period SMA near 0.6980 form a secondary demand zone that should limit deeper pullbacks if the broader constructive tone is to persist.

(The technical analysis of this story was written with the help of an AI tool. Know more.)