USD/JPY sticks to modest gains, remains below 135.00 amid subdued USD price action

USD/JPY gains traction for the second straight day, albeit lacks any follow-through.
A combination of factors undermines the JPY and acts as a tailwind for the major.
The USD stands tall near a one-week high and remains supportive of the move up.

Haresh Menghani FXStreet

The USD/JPY pair builds on the overnight goodish rebound from the 133.75 region, or a one-week low. and gains some follow-through traction for the second successive day on Friday. The pair maintains its bid tone through the early part of the European session and is currently placed around the 134.70 region, up over 0.20% for the day.

A generally positive tone around the equity markets, along with the Bank of Japan's (BoJ) dovish outlook, undermines the safe-haven Japanese Yen (JPY) and turns out to be a key factor acting as a tailwind for the USD/JPY pair. It is worth recalling that the BoJ Governor Kazuo Ueda, speaking in parliament earlier this week, said it was too early to discuss specific plans for an exit from the massive stimulus programme.

The US Dollar (USD), on the other hand, reverses a modest intraday dip and stands tall near a one-and-half-week high touched on Thursday, which, in turn, lends additional support to the USD/JPY pair. The uncertainty over the Federal Reserve's (Fed) next policy move, along with a modest uptick in the US Treasury bond yields, continue to underpin the Greenback, though the US debt ceiling concerns act as a headwind.

The US CPI report released earlier this week pointed to signs of easing inflationary pressure and reaffirmed market expectations about an imminent pause in the Fed's year-long rate-hiking cycle. Investors, however, remain divided over the possibility of rate cuts later this year. This, in turn, holds back the USD bulls from placing aggressive bets and might keep a lid on any meaningful upside for the USD/JPY pair, at least for now.

Market participants now look forward to the release of the Preliminary Michigan Consumer Sentiment Index from the US, due later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the USD/JPY pair. Apart from this, traders will take cues from the broader risk sentiment to grab short-term opportunities on the last day of the week.

Technical levels to watch

USD/JPY

Overview
Today last price	134.72
Today Daily Change	0.30
Today Daily Change %	0.22
Today daily open	134.42

Trends
Daily SMA20	134.71
Daily SMA50	133.76
Daily SMA100	132.89
Daily SMA200	137.03

Levels
Previous Daily High	134.84
Previous Daily Low	133.74
Previous Weekly High	137.78
Previous Weekly Low	133.5
Previous Monthly High	136.56
Previous Monthly Low	130.63
Daily Fibonacci 38.2%	134.42
Daily Fibonacci 61.8%	134.16
Daily Pivot Point S1	133.83
Daily Pivot Point S2	133.24
Daily Pivot Point S3	132.73
Daily Pivot Point R1	134.93
Daily Pivot Point R2	135.43
Daily Pivot Point R3	136.03

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold hits fresh three-month low below $4,000 amid surging energy prices

Gold slides to a fresh three-month low at $3,986.74 in the Asian trade on Friday. The precious metal faces intense selling pressure, following a consolidation breakdown that took place on the range between $4,227.90 and $4,066.64 in the past three weeks.

Cardano: Whale selling deepens correction

Cardano (ADA) edges higher by nearly 2% on Friday, following a roughly 6% decline the previous day. The pullback aligns with the sell-side appeal among large-wallet investors, commonly referred to as whales, and Cardano derivatives. The technical outlook for ADA is bearish, with downside momentum persisting. Whales are losing their appetite for holding ADA tokens, fueling near-term selling pressure.

The Bank of England just got its clearest reason to hike. Here's what it's really watching

UK inflation as measured by the CPI accelerated to 3.5% YoY in September, up from 3.1% in August, according to the Office for National Statistics. This is the highest level since October 2025, exceeding economists' expectations of 3.4% and pushing inflation further from the BoE's 2% 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.