Today’s Market Outlook
9 September 2026
Yen-Buying Sentiment Persists
Oversold Risks in the 152 Range, but Selling on Rallies Remains Favored
Market Summary
The FX market remains focused on yen buying.
USD/JPY continues to attract selling on rebounds amid concern over the unwinding of yen carry trades. During the London morning session, it fell back into the 152 range for a second consecutive day.
The pair did not reach the previous day’s low and has since staged a modest rebound. Given the scale of the recent decline, market participants are cautious about chasing the move lower in the 152 range. Overall, however, the market remains heavy on the upside.
Dollar selling is also evident in pairs such as EUR/USD, although price moves remain limited. With the ECB meeting on 10 September approaching, the euro is finding it difficult to establish a decisive direction.
USD/JPY
USD/JPY has fallen by around ¥7.50 in just one week, from ¥160.39 on 2 September.
It has successively broken below the former support levels of ¥155.30, ¥155.00, ¥154.00, and ¥153.00, reinforcing the momentum behind yen strength.
However, after such a sharp decline in a short period, profit-taking on yen-long positions and short covering in dollar positions are also likely to emerge in the ¥152 range.
Key near-term levels are as follows.
・¥152 range: Current area of contention
・Around ¥152.89: Previous day’s low
・Around ¥152.10: Year-to-date low
・¥152.00: Psychological support
・¥153.00: Initial rebound target
・¥154.00: Key level for assessing the strength of selling on rallies
・¥155.00 to ¥155.30: Important former support zone
If the pair holds above the previous day’s low and recovers into the ¥153 range, short-term buying may broaden.
Conversely, if rebounds are sold between the ¥153 and ¥154 levels, it will be easier to conclude that the yen-strengthening trend remains intact.
A clear break below ¥152.10 could trigger a renewed acceleration in yen buying as the year-to-date low is breached.
Treasury Secretary Bessent’s Warnings Against Yen Weakness
U.S. Treasury Secretary Bessent has made comments cautioning against speculative yen selling.
Markets increasingly see the United States as unwilling to tolerate excessive dollar strength and yen weakness. This has heightened concern that U.S. and Japanese currency authorities may be working together to restrain yen depreciation.
Warnings from the U.S. Treasury Secretary, in addition to Japan’s own rhetoric against yen weakness, are weighing on USD/JPY.
Even without actual FX intervention, official comments could continue to make it difficult for speculators to rebuild substantial yen-short positions.
Yen Carry-Trade Unwinding
The key question is how far the unwinding of yen carry trades will continue.
A yen carry trade involves selling the low-yielding yen to buy higher-yielding currencies or risk assets. Low FX volatility and stable market conditions are essential to this strategy.
However, USD/JPY has fallen by around ¥7.50 in one week, meaning FX losses have significantly exceeded the returns generated by interest-rate differentials.
If the unwinding of yen carry trades gains momentum, the following sequence could continue:
Closing yen-short positions
→ Yen buying
→ Declines in USD/JPY and yen crosses
→ Additional position closures as losses expand
→ Further yen strength
It is too early to conclude that the carry-trade unwind has ended simply because the market appears oversold in the short term.
USD/JPY needs not only to rebound, but FX volatility must also decline, while yen crosses and equity markets need to stabilize.
Oversold-Rebound Risk
Although the yen-strengthening trend continues, aggressively buying yen in the ¥152 range carries risk.
USD/JPY has fallen sharply in a short period, making it vulnerable to short covering even on limited news. Even without major economic data or new official comments, position adjustments alone could produce a rebound of around ¥1.
In addition, if investors who had maintained yen-short positions from ¥160.39 continue to close those trades, the pressure from carry-trade unwinding could temporarily ease.
For this reason, fresh dollar selling and yen buying in the ¥152 range are likely to focus more on confirming rebounds than chasing the downside.
Yen Crosses
Yen crosses such as EUR/JPY and GBP/JPY are also likely to follow the broader direction of USD/JPY.
If the yen carry-trade unwind continues, selling pressure is likely to extend beyond USD/JPY into the crosses.
However, yen crosses have also fallen sharply in a short period, encouraging greater caution about selling near the lows.
If USD/JPY rebounds into the ¥153 range, yen crosses may also see short-covering rallies. Conversely, if USD/JPY is capped by selling on rallies and breaks below the previous day’s low, yen crosses could fall another leg.
If equity markets weaken, risk aversion and carry-trade unwinding may reinforce each other, potentially producing larger declines in yen crosses than in USD/JPY.
EUR/USD
EUR/USD remains biased toward dollar weakness, but price action is limited.
The market is waiting for the ECB meeting on 10 September, making it difficult for euro-specific momentum to develop.
If the ECB emphasizes inflation risks, the euro is likely to strengthen. If it places greater emphasis on concerns over economic slowing, euro selling is likely to increase.
Until then, EUR/USD is likely to remain in a narrow range while taking its cues from broad dollar moves.
Key Factors for Assessing Continued Yen Strength
The following points are important in judging whether yen strength will extend further.
・Whether USD/JPY breaks below the previous day’s low
・Whether the ¥152.10 year-to-date low can hold
・Whether selling on rallies intensifies between ¥153 and ¥154
・Whether yen carry-trade unwinding continues
・Whether U.S. and Japanese officials continue to caution against yen weakness
・Whether FX volatility remains elevated
・Whether global equity markets stabilize
・Whether yen crosses continue to decline
If USD/JPY holds above the previous day’s low and recovers through ¥153 toward ¥154, a broader correction of the sharp decline is more likely.
Conversely, if rebounds remain weak and the pair falls below ¥152.10, the market will need to guard against yen strength entering its next phase.
Summary
USD/JPY has fallen by around ¥7.50 from ¥160.39 and is now trading in the ¥152 range.
Because the decline has been so sharp in a short time, market participants are increasingly cautious about chasing the move lower on oversold concerns.
However, warnings from U.S. Treasury Secretary Bessent against speculative yen selling, together with concern over yen carry-trade unwinding, mean rallies are still likely to attract selling.
The previous day’s low and the ¥152.10 year-to-date low are the key downside levels. On the upside, the focus is whether USD/JPY can recover ¥153 and subsequently rebound toward ¥154.
The yen-strengthening trend remains intact, but price action near the lows is likely to be volatile. Rather than chasing a fresh decline, markets will focus on the strength of rebounds and whether the yen carry-trade unwind continues.
