JPY steadies after recent pullback – Scotiabank

FXStreet Insights Team FXStreet

The Japanese Yen (JPY) is consolidating above its late-November lows as yield spreads tilt modestly against it. With BoJ tightening expectations firm and key Fed and Tankan events approaching, near-term volatility risks remain elevated, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Wider US–Japan yield spread drives latest move

"The yen is steady, consolidating its recent pullback while still trading above the local low from mid/late-November. The latest pullback has been fundamentally driven, with US-Japan yield spreads widening modestly from their recent lows."

"The outlook for relative central bank policy remains supportive as we head into next week’s BoJ policy meeting, with markets pricing 23bpts of tightening. Near-term risk lies with the Fed, and the quarterly domestic Tankan sentiment figures scheduled for release early next week."

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.

GBP/USD remains flattish around 1.3300

GBP/USD alternates gains with losses near the 1.3300 threshold on Wednesday. Indeed, Cable struggles to gain traction as the Greenback remains resilient ahead of the Fed gathering later in the day. Moving forward, the British Pound should remain under the microscope in light of the BoE meeting on Thursday.

EUR/USD treads water below 1.1400; focus is on the Fed

EUR/USD trades in a tight range below 1.1400 on Wednesday as the US Dollar (USD) benefits from risk aversion amid the deepening crisis in the Middle East. Investors refrain from taking large positions ahead of the Fed’s policy decision, which could provide fresh directional impetus for spot.

Gold recedes to multi-day troughs below $4,000

Gold remains on the back foot on Wednesday, breaching below the psychological $4,000 level per troy ounce despite the US Dollar’s lack of direction. Escalating tensions in the US-Iran conflict weigh on the precious metal, while investors await the FOMC event later in the day.

Bitcoin slips below support, Ethereum and XRP flash bearish signals

Bitcoin, Ethereum and Ripple remain under pressure on Wednesday after a mild correction earlier this week. BTC slips below a key support zone, and ETH is testing a key resistance zone. Meanwhile, XRP is drifting toward the psychologically important $1.00 support level.

Federal Reserve set to hold interest rates steady, yet a hike can’t be ruled out

The United States (US) Federal Reserve (Fed) announces its interest rate decision on Wednesday, another pivotal meeting for markets to gauge the stance of policymakers as they assess how rising crude Oil prices could impact the inflation outlook.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.