USDJPY capitulates to below 140.00 amid sustained USD selling, channel breakout

USDJPY breaks lower amid sustained USD selling.
Bets for less aggressive Fed rate hikes and sliding US bond yields weigh on the buck.
The risk-on impulse could undermine the safe-haven JPY and lend support to the pair.
A more dovish BoJ might also hold back bears from placing fresh bets around USDJPY.

Haresh Menghani FXStreet

The USDJPY plunges lower on Friday following up the previous day's softer US CPI-inspired slump to the 140.20 area, or a two-month low. The pair is now trading below 140.00, has broken out of a long-term rising channel on an intraday basis, and if the break holds on a daily basis, could be on course to weaken substantially further, possibly even to as low as the vicinity of the 200-day Simple Moving Average in the 132.00s, if the channel breakout fullfills its price objective.

The US Dollar (USD) drops to its lowest level since August 18 during the first half of the European session and turns out to be a key factor acting as a headwind for the USDJPY pair. The latest US consumer inflation figures released on Thursday indicated that the worst of the post-pandemic price spike is over. This, in turn, reaffirms expectations that the Federal Reserve will slow the pace of its policy tightening in the coming months, which, in turn, continues to weigh on the greenback.

In fact, the current market pricing points to over an 80% chance of a 50 bps Fed rate hike in December as compared to the probability of 56.8% before the US CPI report. Moreover, expectations for peak US interest rates also dropped below 5%, which is evident from a further decline in the US Treasury bond yields. The resultant narrowing of the US-Japan rate differential offers some support to the Japanese Yen and further contributes to the USDJPY pair's intraday pullback of over 170 pips.

That said, the prevalent risk-on mood, as depicted by a strong rally in the equity markets - might hold back traders from placing aggressive bearish bets on USDJPY. Apart from this, a more dovish stance adopted by the Bank of Japan could help ease the bearish pressure. Nevertheless, spot prices remain on track to register losses for the fourth successive week and the technical picture looks decidedly bleak. Traders now look to the Preliminary Michigan US Consumer Sentiment Index for some impetus.

Technical levels to watch

USD/JPY

Overview
Today last price	140.62
Today Daily Change	-0.61
Today Daily Change %	-0.43
Today daily open	141.23

Trends
Daily SMA20	147.57
Daily SMA50	145.42
Daily SMA100	140.73
Daily SMA200	132.62

Levels
Previous Daily High	146.59
Previous Daily Low	141.2
Previous Weekly High	148.85
Previous Weekly Low	145.67
Previous Monthly High	151.94
Previous Monthly Low	143.53
Daily Fibonacci 38.2%	143.26
Daily Fibonacci 61.8%	144.53
Daily Pivot Point S1	139.42
Daily Pivot Point S2	137.62
Daily Pivot Point S3	134.03
Daily Pivot Point R1	144.81
Daily Pivot Point R2	148.39
Daily Pivot Point R3	150.2

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 stays defensive below 0.7150 after Chinese data

AUD/USD remains on the back foot below 0.7150 in the Asian session on Tuesday, close to an over three-week low touched the previous day. US bond yields hold near multi-year highs ahead of the FOMC meeting and oil-driven inflation risks, supporting the US Dollar and weighing on the currency pair. Mixed Chinese activity data for August also fail to inspire the Aussie.

USD/JPY extends gains toward 155.00 amid USD resurgence

USD/JPY keeps pushing higher toward 155.00 early Tuesday, looking for more upside, as traders await the FOMC and BoJ meetings this week. Meanwhile, Fed rate-hike bets and oil-driven inflation risks keep US bond yields near multi-year highs, supporting the US Dollar and the pair. That said, a more hawkish repricing of the BoJ normalization path might continue to underpin the Japanese Yen and could limit USD/JPY's upside. .

Gold regains $4,300 as traders await FOMC meeting

Gold regains $4,300 in the Asian session on Tuesday, but remains vulnerable near a one-month low, touched the previous day. Fed rate-hike expectations and inflation concerns remain supportive of elevated US bond yields, underpinning the US Dollar and weighing on the non-yielding bullion. Bears, however, might wait for the outcome of a two-day FOMC meeting on Wednesday before placing fresh bets.

WTI rises above $98.50 amid Middle East supply fears

West Texas Intermediate oil price extends its gains for the second successive day, trading around $98.60 per barrel during the Asian hours on Tuesday. Crude oil prices appreciate as traders continue to navigate heightened uncertainty over global supply.

Hard assets are entering their next explosive phase – Are you positioned?

It’s official: Commodities and Hard Assets have become the best-performing asset class of 2026. In a year defined by persistent inflation, geopolitical conflict, rising sovereign debt and intensifying supply disruption, capital is rotating aggressively into the one area governments cannot print and central banks cannot manufacture: scarce physical assets.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.