USD/JPY: Markets digest report of BoJ’s undeterred hawkishness – Scotiabank

FXStreet Insights Team FXStreet

The Japanese Yen (JPY) is strong, up 0.7% against the US Dollar (USD) and outperforming all of the G10 currencies as we head into Tuesday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

JPY seems outperforming

"Renewed confidence in the BoJ’s intentions for policy tightening are driving the yen higher, with media reporting that policymakers are not deterred by the latest political uncertainty introduced by PM Ishiba’s upcoming resignation."

"The reporting suggested that the BoJ is likely to keep policy unchanged at its next meeting on September 19, shifting the focus to October and December for the resumption of rate hikes. Narrowed US-Japan yield spreads are offering the JPY fundamental support, and markets are pricing in 16bpts of tightening by year-end – up from 11bpts on Monday."

"We are medium-term USD/JPY bears and highlight the latest break below 50 day MA (147.42) support. We look to continued weakness toward the 142.00 level in the coming weeks."

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.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold holds steady below $4,500; looks to US NFP for fresh impetus

Gold consolidates its strong gains recorded over the past two days and trades below $4,500 during the Asian session on Friday, awaiting the US NFP report for cues about the Fed's policy path amid reduced September rate-hike bets. In the meantime, the recent fall in US bond yields keeps the US Dollar depressed and acts as a tailwind for the non-yielding bullion.

Bitcoin and Gold Outlook: BTC and XAU recover as US ISM Services PMI edges higher in August

Bitcoin (BTC) strongly rises to trade above the pivotal $80,000 level on Thursday. The Crypto King is rallying alongside broader cryptocurrency prices following the release of the United States (US) Services PMI. Gold (XAU/USD) is similarly bullish, trading at $4,500 at the time of writing. The metal is up over 2% on the day, signaling the return of bulls as market sentiment improves.

Canada's 6.4% unemployment rate: Why Friday's jobs print puts the BoC's slack story on trial

The Bank of Canada (BoC) held at 2.25% on Wednesday for a seventh straight meeting and rewrote the one paragraph that still argues against a hike. In July, the BoC’s statement called the labour market soft and pinned the unemployment rate inside a 6.5%-7% range it had held since the end of 2024. July's Labour Force Survey (LFS) then printed 6.4%.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.