JPY

Yen weakness has hung around and USD/JPY and GBP/JPY both retain bullish appeal. But for those looking for Yen-strength, perhaps in anticipation of next month’s policy review from the BoJ, EUR/JPY could hold greater attraction.

Yen-weakness has remained through Japanese general elections and both EUR/JPY and GBP/JPY have put in clean breakout moves from ascending triangle formations.

The 150 level had held as resistance in USD/JPY until this week’s US open, at which point another DXY-fueled breakout appeared. The next major level up is the same that held multi-year highs in the pair in Q4 of each of the past two years.

For FX traders the USD/JPY backdrop has been full of intrigue for the past couple years, and that story isn’t yet over as the pair nears the spot that’s been the scene of some major drama in the pair after the build of the carry.

USDJPY, Silver Forecast: As the U.S. dollar strengthens and uncertainty persists around monetary policies, elections, and geopolitical tensions, both USDJPY and Silver are proceeding through the third week of October on a positive note.

The USD extended its bullish trend this week but perhaps the larger focal point was Gold, defending 2600 and continuing the rally. For next week, USD/JPY resistance and EUR/USD pullbacks are in focus.

USD/JPY has shown a strong trend after the false breakdown at 140.00 last month. And price action has shaped the narrative, with many proclaiming the return of the carry trade even as the Fed is expected to cut heavily next year.

Just last week USD/JPY was re-testing a key low at 141.69. A week later after a strong NFP report and many are proclaiming the return of the carry trade, even with the Fed expected to continue cutting rates through the end of next year.

Is the carry trade coming back? USD/JPY, EUR/JPY and GBP/JPY have all started 2024 with bullish moves despite the expectation for rate cuts starting in 2024.

Open interest has fallen notably on USD/JPY since its failed ‘bid’ for spot prices to break and hold above 150. And that further suggests a glass ceiling for prices. Japanese yen futures also saw grow longs increase by 19.6%, although traders remained heavily net-short.

It’s been a big week for global markets and it’s not over yet, with the Bank of Japan rate decision scheduled for later today.

With EUR/JPY and GBP/JPY testing critical support, price action over the next 30 hours will go a long way toward determining if the year-to-date trends extend or end from here...

The USD/JPY breakout has continued even after an intervention threat, but both EUR/JPY and GBP/JPY have shown stall in those bullish trends over the past month, raising questions of reversal potential.

Japanese officials are threatening to intervene in FX markets again, prompted by the USD/JPY surging over 2% since the start of September.

Japan’s export sector is benefitting from the weaker JPY but that’s not flowing through to the broader economy yet.

Another way to support the Japanese yen may be for the BOJ to stop intervening in markets.

USD/JPY remains in an uptrend after testing rising trend line support and the 50-day EMA midway through last week.