Japanese Yen: Yield pressure risks fresh losses against US Dollar – OCBC

FXStreet Insights Team FXStreet

OCBC’s Christopher Wong highlights a rebound in USD/JPY as higher US Treasury yields, stronger US Dollar (USD) and elevated Oil prices support the pair, even as expectations for further BOJ normalisation cap upside. He flags tentative bullish divergence on technicals and says US CPI will be pivotal for whether the recent USD/JPY rebound extends or fades.

Higher yields underpin Dollar against Yen

"USD/JPY rebounded. Firmer UST yields following PPI and a broader USD recovery provided support, while higher oil prices added to inflation concerns and were also a less favourable development for Japan’s terms of trade. Focus now shifts to US CPI."

"An upside surprise, particularly in core inflation, could push UST yields higher and extend the USD/JPY rebound. Conversely, a softer print would likely unwind some of the recent rates repricing and allow the JPY recovery theme to regain traction."

"Near-term direction is therefore likely to remain sensitive to the US rates leg, while expectations for further BOJ normalisation should continue to provide a counterweight to sustained USD/JPY upside."

"Our earlier technical caution for dragonfly doji - bullish reversal risk played out. Last seen at 154.25 levels. Bearish momentum intact though there are tentative signs of it fading while RSI rose from oversold conditions."

"We now flag the potential risks of bullish divergence on MACD and RSI tentatively forming though it is still early to confirm. Resistance at 155 (23.6% fibo retracement of 2026 low to high), 156.70 (38.2% fibo). Support at 153, 152.20 levels (2026 low)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD sits near a one-month top, above 0.7000 amid fresh USD selling

AUD/USD holds above 0.7000 through the Asian session, trading near a one-month high touched earlier this Monday amid renewed US Dollar selling. US bond yields decline further amid a modest pullback in crude oil prices, capping the USD recovery from a three-week low. Moreover, bets for a November RBA rate hike support the Aussie, though upside seems capped ahead of the crucial two-day FOMC meeting, starting Tuesday.

USD/JPY struggles below 157.00 on weak USD; holds above one-month low ahead of Fed, BoJ meetings

USD/JPY attracts fresh sellers during the Asian session on Monday, stalling its recovery from the lowest level since September 18, touched Friday as a further decline in US bond yields weighs on the US Dollar. Meanwhile, the Japanese Yen benefits from a more hawkish BoJ, further weighing on the currency pair. The downside, however, seems limited as traders keenly await Fed and BoJ policy meetings later this week.

Gold looks slightly bid above $4,000

Gold manage to regain some balance, leaving behind two daily drops in a row and reclaiming the key $4,000 mark per troy ounce and above on Monday. The better tone in the US Dollar and mixed US Treasury yields accompany the precious metal’s uptick, while declining crude oil prices appear to sustain the bounce for now.

Bitcoin stalls around $80,000 as geopolitical tensions dampen risk appetite

Bitcoin hovers around $80,500 on Monday after three straight weeks of correction. Rising geopolitical tensions in the Middle East continue to push oil prices higher, stoking inflation concerns and dampening risk appetite.

Everyone's bracing for a hawkish central bank week. Here's why the surprise could be dovish

Five of the world's major central banks are preparing to announce monetary policy decisions this week, with investors increasingly anticipating higher interest rates as the global energy shock continues to push inflation above target.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.