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✅ U.S. Regional Bank Scandal Triggers Renewed Dollar Selling — USD/JPY Falls into ¥149 Range

✅ U.S. Regional Bank Scandal Triggers Renewed Dollar Selling — USD/JPY Falls into ¥149 Range

💥 Fresh Dollar Sell-Off Sparked by U.S. Regional Bank Credit Fears

In New York trading, U.S. regional bank shares plunged after revelations of fraudulent loan activity, igniting renewed concerns over financial stability.
The resulting risk-off sentiment triggered another wave of broad-based dollar selling across global markets.

As investor anxiety deepened over potential contagion, Tokyo trading saw the dollar weaken sharply across the board, with USD/JPY breaking below the key ¥150 mark to trade in the mid-¥149 range.

  • EUR/USD rebounded above 1.17

  • GBP/USD climbed toward 1.3480

  • Cross-yen pairs traded sideways, reflecting a dollar-driven move rather than risk-on yen selling

💴 USD/JPY: Below 150, Market Testing Key Support Zone

The pair’s decline was driven by a combination of factors:

  • The unwinding of the “Takaichi Trade” following Japan’s coalition breakup

  • Risk-off yen demand fueled by U.S. banking sector jitters

After briefly rebounding above ¥151, USD/JPY reversed sharply, sliding to the mid-¥149s by afternoon — a clear psychological break below the 150 level.

If 149 fails to hold, next supports are projected at 148.2–147.8, where medium-term buyers may re-emerge.

📊 Major FX Pairs (Tokyo Session)

Pair Latest Comment
USD/JPY Mid-¥149 Accelerating dollar sell-off; key support breach confirmed
EUR/USD ~1.1710 Euro buying strengthens as dollar weakens
GBP/USD ~1.3480 Firm tone as U.K. fiscal concerns ease
EUR/JPY ~¥175 Yen demand limits upside momentum

🏦 Focus Ahead: Equity Contagion & Gold Overheating

  • U.S. bank stocks remain under pressure as credit risk concerns spread.

  • Meanwhile, gold continues to surge, driven by risk aversion, diversification demand, and central bank buying — a powerful triple catalyst.

  • However, overheating signals are emerging, suggesting possible short-term pullback risks.

Heading into the weekend, traders should brace for rising volatility across stocks, bonds, and FX as cross-asset flows react to credit headlines.

📈 Tonight’s Key Events

Economic Data (Oct 17 release):

  • 🇪🇺 Eurozone CPI (Final, Sep)

  • 🇨🇦 Canada International Securities Transactions (Aug)
    → Minimal impact expected; CPI is a final revision.

Central Bank Speakers:

  • Huw Pill (BoE Chief Economist)

  • Joachim Nagel (Bundesbank President)

  • Catherine Mann & Sarah Breeden (BoE)

  • James Salem (St. Louis Fed President)

  • Olli Rehn (Bank of Finland Governor)

Note: The Fed’s blackout period (no public comments before the FOMC) begins this weekend,
making Salem’s remarks potentially the last significant policy signal before the silence.

🏛 Japan Politics: Coalition Talks Progress Between LDP and Ishin

Japan Innovation Party co-leader Fujita stated:

“Talks have made major progress — we are entering the final stage.”

Markets briefly responded with yen selling, on hopes of greater political stability,
but the move was short-lived as U.S. bank jitters kept dollar pressure dominant.

✅ Summary

  • U.S. regional bank credit fears have emerged as a fresh catalyst for dollar weakness.

  • USD/JPY’s break into the ¥149 range signals a potential trend reversal.

  • Fed’s blackout period begins after tonight — Salem’s speech could mark the last directional cue for the week.

  • With political uncertainty in Japan and financial stress in the U.S. overlapping,
    the market heads into the weekend poised for high volatility and risk aversion.

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