USD/JPY pulls away from daily lows as US stocks recover, stays near 108.20

US Dollar Index stays in consolidation above 95.50.
Wall Street's recovers modestly after starting the day sharply lower.

Eren Sengezer FXStreet

The USD/JPY started the week under pressure as the disappointing data from China on Monday caused concerns over a global economic slowdown to resurface while revealing the negative impact of the Trump administration's trade policy on the Chinese economy. After slumping to the 108 area, however, the pair staged a modest recovery and now looks to close the day near 108.20, where it's still down 0.33% on a daily basis.

Pressured by the dismal market mood, major equity indexes in the U.S. started the day sharply lower but retraced a large part of their early losses to allow the pair to stay in a consolidation phase near the 108.20 area. At the moment, the Dow Jones Industrial Average is losing 0.4% while the S&P 500 and the Nasdaq Composite are down 0.5% and 0.85%, respectively.

Meanwhile, amid a lack of macroeconomic data releases and fresh developments surrounding the government shutdown, the US Dollar Index extended its sideways course in its tight daily range, not providing any directional clues to the pair. The DXY was last seen losing 0.05% on the day at 95.60.

During the Asian trading hours on Tuesday, money supply and machine order tools data from Japan will be released, which are unlikely to receive a significant reaction from the markets.

Key technical levels

USD/JPY

Overview:
    Today Last Price: 108.2
    Today Daily change: -35 pips
    Today Daily change %: -0.322%
    Today Daily Open: 108.55
Trends:
    Previous Daily SMA20: 110.03
    Previous Daily SMA50: 112
    Previous Daily SMA100: 112.17
    Previous Daily SMA200: 111.14
Levels:
    Previous Daily High: 108.6
    Previous Daily Low: 108.14
    Previous Weekly High: 109.09
    Previous Weekly Low: 107.77
    Previous Monthly High: 113.83
    Previous Monthly Low: 109.55
    Previous Daily Fibonacci 38.2%: 108.43
    Previous Daily Fibonacci 61.8%: 108.32
    Previous Daily Pivot Point S1: 108.26
    Previous Daily Pivot Point S2: 107.97
    Previous Daily Pivot Point S3: 107.8
    Previous Daily Pivot Point R1: 108.72
    Previous Daily Pivot Point R2: 108.89
    Previous Daily Pivot Point R3: 109.18

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD remains offered; bears target 1.3600

GBP/USD now leaves behind part of its recent recovery and revisits the low 1.3600s at the beginning of the week. Indeed, Cable trades with a mild downward bias amid decent gains in the Greenback as investors remain wary of upcoming US data releases and the Jackson Hole event.

EUR/USD remains sidelined above 1.1650

EUR/USD trades on the defensive following the closing bell on Wall Street on Monday, hovering around the 1.1660 region and adding to Friday’s small decline. The pair’s pullback comes in response to an acceptable rebound in the US Dollar in a context of generalised caution ahead of key US data releases and Chair Warsh’s speech in Jackson Hole.

Gold poised to extend its bullish run

Gold surrenders part of its initial advance, although it keeps its bullish pace well and sound above the $4,600 mark per troy ounce on Monday. The precious metal’s move higher comes despite slight gains in the US Dollar and a modest pullback in US Treasury yields across the curve.

XRP surged 72%, but is the rally really about XRP?

Ripple (XRP) surged more than 72% in less than a week, its strongest rally since July 2025, as cryptocurrency prices broadly broke out. But the move has a problem: it may have little to do with XRP itself. The token's near-term rally appears to have been driven largely by a broader liquidity shift after the US Treasury expanded long-end bond buybacks, pulling yields lower and lifting risk assets.

Convulsion in credit markets

The United States government just posted a $432.3 billion deficit for July, the largest monthly shortfall since March of 2021. That single burst of red ink pushed the yeartodate deficit to $1.8 trillion, with two months still remaining in fiscal 2026. At this pace, Washington will soon wax nostalgic for the “good old days” when annual deficits were only $2 trillion.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.