✅ Quiet Start to the Week — Yen Selling Persists as USD/JPY Holds Around ¥154
💹 USD/JPY: Calm Opening, Yen Carry Still in Play
Tokyo markets opened quietly on Monday due to the Culture Day holiday, resulting in thin liquidity.
Following last week’s strong dollar-buying and yen-selling momentum,
USD/JPY remains firm in the upper ¥154 range (154.10–154.30),
hovering near multi-month highs with no clear signs of correction.
The yen carry trade continues to expand, supported by wide interest rate differentials,
keeping short-term yen weakness firmly entrenched.
🏦 Recap: Major Central Bank Events — Policy Divergence Clearly Defined
| Central Bank | Policy | Market Reaction | Summary |
|---|---|---|---|
| 🇺🇸 FRB (FOMC) | 0.25% rate cut (as expected) | Dollar bought | Powell: “A December rate cut is not a certainty” → Dollar supportive |
| 🇯🇵 BOJ | Hold (7–2 vote) | Yen sold | Ueda: “Outlook improving, but more data needed” → Cautious tone |
| 🇪🇺 ECB | Hold | Limited reaction | Confirmed inflation goal, steady policy stance |
| 🇨🇦 BoC | Hold | CAD sold | Dovish tone, leaving room for further easing |
The U.S.–Japan policy gap has become even clearer,
with yield spreads continuing to fuel yen carry trades.
This environment favors a sustained yen-selling bias in the near term.
🗣️ Ueda’s Cautious Tone Keeps Yen Weak
“The likelihood of achieving our price and economic outlook has risen, but we need to see more data.”
“There’s no growing concern of being behind the curve.”
These remarks led markets to push back December rate-hike expectations,
with traders now assigning a 98% probability of a January hike.
At the same time, PM Takaichi’s pro-growth ‘high-pressure economy’ policy
(fiscal expansion + accommodative stance) continues to limit the BOJ’s tightening flexibility,
further anchoring yen weakness.
🌍 Global Outlook: Trade Friction Eases, Risk Appetite Sustained
-
China’s Ministry of Commerce announced an agreement with the EU to stabilize supply chains,
easing trade tensions and supporting market sentiment. -
Continued dialogue among U.S., China, and Japan reinforces a short-term risk-on bias,
keeping carry trades attractive while risk aversion remains subdued.
📊 Upcoming Key Data & Events
| Region | Indicator/Event | Focus | Importance |
|---|---|---|---|
| 🇫🇷 France | Oct Manufacturing PMI (final) | Slight improvement expected | ★★ |
| 🇩🇪 Germany | Oct Manufacturing PMI (final) | Still below expansion threshold | ★★ |
| 🇪🇺 Eurozone | Oct Manufacturing PMI (final) | Ongoing slowdown trend | ★★★ |
| 🇬🇧 U.K. | Oct Manufacturing PMI (final) | Persistently weak levels | ★★ |
| 🇺🇸 U.S. | ISM Manufacturing Index (Oct) | Forecast 49.5 (prev. 49.1) | ★★★★ |
| 🇹🇷 Turkey | Oct CPI | Inflation remains high | ★★ |
| 🇨🇭 Switzerland | Oct CPI | Gradual decline | ★★ |
📍 ISM Focus:
If the index improves, dollar strength could continue;
a persistent sub-50 reading may revive U.S. slowdown concerns.
💬 Central Bank Speakers
-
Europe: Simkus, Lane, Escrivá, and Koch (ECB)
-
U.S. session: Daly (SF Fed), Macklem (BoC), Cook (Fed Board)
→ Diverging tones between hawks and doves could steer short-term dollar direction.
💱 London Session Snapshot (as of 18:30 JST)
| Pair | Latest | Comment |
|---|---|---|
| USD/JPY | 154.10 | Holding near highs; yen selling persists but topside heavy |
| EUR/USD | 1.1518 | Drifting lower on continued dollar buying |
| EUR/JPY | 177.49 | Yen weakness steady, but momentum easing |
| GBP/JPY | 202.20 | Slight pullback in cross-yen amid profit-taking |
✅ Summary: Outlook for the Week
The week began quietly, but the U.S.–Japan yield differential continues to drive yen carry trades.
Attention now shifts to the ISM, ADP, and U.S. employment data later in the week,
which could reshape the market narrative depending on outcomes.
For now, USD/JPY is expected to remain range-bound around ¥154,
with buy-on-dip interest prevailing as investors balance carry incentives against intervention risk.
