- The Japanese Yen rises while the US Dollar depreciates ahead of the US election results on Tuesday.
- JPY liquidity is expected to be limited as Japanese markets are closed for Sports Day on Monday.
- The US dollar depreciated due to the release of weaker non-farm payrolls ahead of the Fed decision later this week.
The Japanese Yen (JPY) gains ground on Monday while the US Dollar (USD) falls, possibly driven by growing uncertainty surrounding Tuesday’s US presidential election. However, JPY liquidity is somewhat limited due to the closure of Japanese markets for Sports Day, which prevents physical trading of US Treasuries.
The JPY could weaken in the future as political and monetary policy uncertainties grow following the victory of the Liberal Democratic Party (LDP) coalition in last week’s parliamentary elections, which has created confusion regarding the direction of the policy of the Bank of Japan (BoJ).
However, BoJ Governor Kazuo Ueda noted in his post-meeting press conference last Thursday that economic risks in the US appear to be easing, which could pave the way for a possible rate hike. Meanwhile, the Bank of Japan decided to keep its policy rate at 0.25%, a move that was widely expected.
Weaker-than-expected non-farm payrolls (NFP) data for October could have contributed to the US dollar’s decline ahead of the Federal Reserve’s (Fed) interest rate decision later this week. According to the CME FedWatch tool, there is a 99.6% chance that the Fed will implement a quarter-point rate cut in November.
Daily Market Summary: Japanese Yen Rises as US Dollar Depreciates Ahead of US Elections
- The latest poll shows Vice President Kamala Harris with slight leads in Nevada, North Carolina and Wisconsin, while former President Donald Trump has a slight lead in Arizona. The candidates are in close races in Michigan, Georgia and Pennsylvania. Conducted from Oct. 24 to Nov. 2, the latest New York Times/Siena College poll indicated that all matchups in seven key states are within a 3.5% margin of error.
- US nonfarm payrolls rose by 12,000 in October, following a revised September gain of 223,000 (down from 254,000), which fell well short of market expectations of 113,000. Meanwhile, the unemployment rate held steady at 4.1% in October, matching the consensus forecast.
- Japan’s Chief Cabinet Secretary Yoshimasa Hayashi stated on Friday that he anticipates that the Bank of Japan will work closely with the government to implement an appropriate monetary policy aimed at achieving its price target in a sustainable and stable manner.
- The au Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) stood at 49.2 in October, indicating a drop from 49.7 in September. This single-figure composite indicator shows that Japanese manufacturing production continued to decline at the start of the fourth quarter of 2024, with both production and new orders declining at steeper rates.
- The US personal consumption expenditure (PCE) price index showed that core inflation rose 2.7% year-on-year in September. Additionally, initial jobless claims fell to a five-month low of 216,000 for the week ending October 25, signaling a robust labor market and dampening expectations of imminent rate cuts by the Federal Reserve (Fed ).
- The Bank of Japan decided to keep its short-term interest rate target at 0.25% following the conclusion of its two-day monetary policy review on Thursday. This decision was in line with market expectations of maintaining stability.
- According to the BoJ’s Third Quarter Outlook Report, the central bank plans to continue raising policy rates as long as the economy and prices align with its forecasts, especially given that real interest rates are currently very low. The Bank of Japan aims to conduct monetary policy with a focus on sustainably and stably achieving its 2% inflation target.
- Annualized US Gross Domestic Product (GDP) expanded 2.8% in the third quarter, below the 3.0% in the second quarter and forecasts of 3.0%. ADP’s employment change report showed 233,000 new workers were added in October, marking the largest increase since July 2023. This followed an upward revision to 159,000 in September and significantly exceeded forecasts of 115,000.
Technical Analysis: USD/JPY is trading below 152.00, the lower limit of the ascending channel
The USD/JPY pair is trading around 151.80 on Monday. Analysis of the daily chart suggests a possible weakening of the bullish bias as the pair has broken below its ascending channel. However, the 14-day Relative Strength Index (RSI) remains above 50, indicating that bullish momentum is still present.
In terms of resistance, the USD/JPY pair faces an obstacle at the lower boundary of the ascending channel, located at the level of 152.90. If the pair manages to re-enter this channel, it could target the recent high at 153.88 before the upper boundary of the channel near 158.90.
On the downside, the 14-day EMA at the 151.60 level serves as immediate support for the USD/JPY pair, with additional support found around the psychological level of 150.00.
USD/JPY: Daily Chart
Japanese Yen PRICE Today
The table below shows the percentage change of the Japanese Yen (JPY) against major currencies today. Japanese yen was the strongest currency against the British pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.58% | -0.54% | -0.21% | -0.17% | -0.75% | -0.39% | -0.27% | |
| EUR | 0.58% | 0.02% | -0.03% | 0.02% | 0.14% | -0.20% | -0.08% | |
| GBP | 0.54% | -0.02% | -0.32% | 0.00% | 0.13% | -0.22% | -0.09% | |
| JPY | 0.21% | 0.03% | 0.32% | 0.04% | 0.00% | 0.02% | 0.24% | |
| CAD | 0.17% | -0.02% | -0.01% | -0.04% | -0.38% | -0.24% | -0.10% | |
| AUD | 0.75% | -0.14% | -0.13% | -0.00% | 0.38% | -0.34% | -0.22% | |
| NZD | 0.39% | 0.20% | 0.22% | -0.02% | 0.24% | 0.34% | 0.13% | |
| CHF | 0.27% | 0.08% | 0.09% | -0.24% | 0.10% | 0.22% | -0.13% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change shown in the box will represent the JPY (base)/USD (quote).
The Japanese Yen FAQs
The Japanese Yen (JPY) is one of the most traded currencies in the world. Its value is determined broadly by the performance of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of Japanese and US bonds or the risk sentiment among traders, among other factors.
One of the mandates of the Bank of Japan is currency control, so its movements are key for the Yen. The BoJ has intervened directly in currency markets on occasion, usually to lower the value of the Yen, although it often refrains from doing so due to the political concerns of its major trading partners. The BoJ’s current ultra-loose monetary policy, based on massive stimulus to the economy, has caused the depreciation of the Yen against its main currency pairs. This process has been exacerbated more recently by a growing policy divergence between the Bank of Japan and other major central banks, which have opted to sharply raise interest rates to combat decades-old levels of inflation.
The Bank of Japan’s ultra-loose monetary policy stance has led to increased policy divergence with other central banks, particularly the US Federal Reserve. This favors the widening of the spread between US and Japanese 10-year bonds, which favors the Dollar against the Yen.
The Japanese Yen is often considered a safe haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. In turbulent times, the Yen is likely to appreciate against other currencies that are considered riskier to invest in.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
