Forex News
- The British Pound rises to a three-week high against the Japanese Yen as rate differentials favour Sterling.
- GBP/JPY extends its recovery, but a cluster of moving averages around 211.66-213.54 caps the upside.
- The RSI and MACD signal improving bullish momentum.
GBP/JPY trades on the front foot on Friday, gaining around 0.50% as broad US Dollar (USD) weakness favours the higher-yielding British Pound (GBP) against the lower-yielding Japanese Yen (JPY), which underperforms all its major peers except the Greenback. At the time of writing, the cross trades around 210.66, its highest level since September 22, heading for a third consecutive weekly gain.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.22% | -0.42% | 0.05% | -0.14% | -0.51% | -0.64% | -0.26% | |
| EUR | 0.22% | -0.21% | 0.23% | 0.06% | -0.28% | -0.43% | -0.05% | |
| GBP | 0.42% | 0.21% | 0.46% | 0.31% | -0.07% | -0.20% | 0.18% | |
| JPY | -0.05% | -0.23% | -0.46% | -0.16% | -0.54% | -0.63% | -0.28% | |
| CAD | 0.14% | -0.06% | -0.31% | 0.16% | -0.36% | -0.55% | -0.13% | |
| AUD | 0.51% | 0.28% | 0.07% | 0.54% | 0.36% | -0.13% | 0.27% | |
| NZD | 0.64% | 0.43% | 0.20% | 0.63% | 0.55% | 0.13% | 0.40% | |
| CHF | 0.26% | 0.05% | -0.18% | 0.28% | 0.13% | -0.27% | -0.40% |
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).
Meanwhile, growing expectations of a Bank of England (BoE) rate hike by year-end could keep the interest rate differential with the Bank of Japan (BoJ) wide. The gap currently stands at 250 basis points, with the BoE’s policy rate at 3.75% and the BoJ’s at 1.25%.
Focus now turns to a heavy batch of UK economic data next week, including labour market figures, inflation and Retail Sales. On the Japanese side, traders await national Consumer Price Index (CPI) data.
Technical analysis
On the daily chart, GBP/JPY trades below the 50-day Simple Moving Average (SMA) at 211.66 and the 100-day SMA at 213.54, which keeps the cross in a capped, near-term bearish bias despite the latest bounce. The 200-day SMA at 213 reinforces a dense overhead barrier together with the 50.0% and 61.8% Fibonacci retracements at 211.75 and 212.90.
Momentum is constructive, with the Relative Strength Index (RSI) hovering around 54 and the Moving Average Convergence Divergence (MACD) above zero with a positive line, yet the modest Average Directional Index near 24 hints that trend strength is fading rather than accelerating.
On the topside, immediate resistance is seen at the 50-day SMA at 211.66, followed closely by the 50.0% Fibonacci retracement at 211.75, while the 61.8% retracement at 212.90 and the 200- and 100-day SMAs at 213.01 and 213.54 build a broader supply zone ahead of the 78.6% level at 214.54. On the downside, initial support appears at the 38.2% retracement at 210.61, with further demand expected at the 23.6% level at 209.19 and the structural low around 206.89; as long as price remains under the cluster of medium- and long-term averages, rallies are likely to be sold into these nearby resistance bands.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Nordea strategists expect a stronger Norwegian Krone (NOK) against the Euro (EUR) over the coming quarters. They forecast EUR/NOK at 10.50 on a three‑month horizon and 10.25 by summer 2027, highlighting Norway’s solid public finances, favourable rate differential versus the Euro, and supported Oil prices, while acknowledging short‑term volatility from swings in sentiment around France and broader risk appetite.
Fiscal contrast and oil support NOK
"We expect EUR/NOK to decline towards 10.50 over the coming three months and further towards 10.25 by the summer of 2027, implying continued NOK strength from current levels."
"Norway faces no equivalent constraint. There is no fragmentation risk to price, since Norway sits outside the currency union and its bonds are not judged against a German benchmark. Nor is there a funding need to defend."
"A further deterioration in sentiment around France could also create periods of market volatility. That would likely weigh on the NOK in the short term, as the krone tends to weaken when risk appetite falls and credit spreads widen."
"Second, we expect oil prices to remain supported for longer than is currently priced."
"Norges Bank raised the policy rate to 4.50% in September and indicated that it will remain elevated for some time. The ECB is at 2.50%, leaving a 200bp differential in the NOK's favour."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- BoJ Governor Kazuo Ueda reiterates that interest rates will continue to rise as underlying inflation approaches the 2% target.
- The timing and pace of future rate hikes will depend on exchange rates, AI-driven demand and Middle East developments.
- Ueda's remarks triggered little market reaction, with USD/JPY virtually unchanged around 157.95 on Friday.
Bank of Japan (BoJ) Governor Kazuo Ueda reiterated on Friday that the central bank will continue raising interest rates as underlying inflation approaches its 2% target, noting that financial conditions remain accommodative.
Ueda said economic activity and price developments remain broadly in line with the BoJ's forecasts, while policymakers will discuss at their upcoming meeting whether to revise their assessment of underlying inflation. He added that the timing and pace of future rate hikes will depend on the impact of exchange rate movements, Artificial Intelligence (AI) demand and developments in the Middle East on prices.
The BoJ Governor also highlighted that some global policymakers appeared more optimistic about AI-driven demand than the Japanese central bank had anticipated, although discussions this week did not materially alter its baseline economic outlook.
Ueda leans hawkish as AI demand and inflation near BoJ target
FXS Speechtracker scores this speech at 8.2/10, above Governor Ueda’s historic 7.5/10 baseline, signaling a modest hawkish tilt. Ueda’s emphasis that underlying inflation is “quite close to 2%,” that economic and price moves are roughly in line with forecasts, and that BoJ will continue to raise rates while financial conditions remain accommodative reinforces a tightening bias supportive of the Yen.
The intention to discuss upgrading the assessment that inflation is approaching 2%, combined with noting more bullish global views on AI demand, underpins a stronger inflation narrative. By tying the timing and pace of future hikes to FX, AI demand and Middle East developments, while stressing no deviation from the baseline view, Ueda signals steady but data-sensitive normalization that should limit YEN downside and may encourage further Yen strength if inflation risks materialize.
Key takeaways
No big gap in view between what we have assessed on inflationary pressure from AI demand, and what I heard from global policymakers.
I felt that there were more policymakers at this meeting who were somewhat more bullish on ai-demand than we had estimated.
We will continue to raise interest rates as underlying inflation approaching 2%, financial conditions are accommodative.
Economic, price moves roughly in LINE with our forecasts.
Did not hear anything at this week's meetings that deviated from our baseline view.
We will discuss at upcoming meeting whether to tweak our assessment that underlying inflation is approaching 2%.
Timing, pace of future rate hikes will be decided looking at impact of fx, AI demand and Middle East developments on prices.
Haven't been in touch with us treasury secretary bessent since we met in asheville.
As underlying inflation is quite close to 2%, it is becoming more important than before to anchor inflation around our target.
Market reaction
Ueda's remarks had little impact on financial markets, with USD/JPY hovering around 157.95 at the time of writing, virtually unchanged on Friday.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
OCBC strategists Sim Moh Siong and Christopher Wong point out USD/SGD has eased, tracking a softer US Dollar (USD) and lower US Treasury yields despite firm US Producer Price Index (PPI) and retail sales. Daily momentum is turning mild and RSI has backed off overbought, suggesting the recent sharp spike may prove a false break. He highlights key support at 1.2790 and 1.2750 and resistance at 1.2840 and 1.2870.
USD/SGD momentum fading
"USD/SGD eased lower, tracking moves in USD, US Treasury yields lower. This is despite US PPI, retail sales coming in firmer."
"Pair was last seen at 1.2820 levels. Mild bullish momentum on daily chart shows signs of fading while RSI eased away from overbought conditions."
"The recent sharp spike higher may end as a false break, given that the spike has failed to build on momentum thus far."
"We continue to watch price action into the week’s close."
"Support at 1.2790 (21, 200 DMAs), 1.2750 (50 DMA). Resistance at 1.2840, 1.2870 (recent high)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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