Japanese Yen remains on the front foot vs weak USD after hawkish BoJ Minutes

USD/JPY drifts lower for the second straight day as hawkish BoJ Minutes underpin the JPY.
Easing inflationary concerns and sliding US bond yields weigh on the USD and spot prices.
Fed hike bets could limit USD losses and support the pair ahead of the US NFP on Friday.

The USD/JPY pair struggles to capitalize on the previous day's goodish rebound from the 157.40 area, or the weekly low, attracting some sellers for the second straight day on Thursday. Bearish traders now await a sustained break below the 158.00 mark before positioning for further losses amid a combination of negative factors.

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Minutes of the Bank of Japan's (BoJ) September meeting showed earlier today that policymakers concurred it was suitable for the bank to keep increasing the policy interest rate and modify the level of monetary easing. This reaffirms market bets for an interest rate hike in December and provides a modest lift to the Japanese Yen (JPY), which, along with the prevailing US Dollar (USD) selling bias, exerts some downward pressure on the USD/JPY pair.

The US midterm elections saw Democrats securing control of both chambers of Congress, raising worries about fiscal gridlock and limiting government spending. Moreover, Democratic leaders vowed to push for an end to the Iran war, prompting traders to price out the geopolitical risk premium. This led to the overnight slump in crude oil prices, which eased inflation fears. This led to a further slide in US bond yields and kept the USD depressed.

However, hawkish US Federal Reserve (Fed) expectations could lend some support to the buck and the USD/JPY pair. According to the CME Group's FedWatch Tool, traders are pricing in over an 80% chance that the US central bank will raise borrowing costs again in December. The bets were reinforced by the better-than-expected release of the US ADP report on Wednesday, which showed that private-sector employment increased by 86,000 in October 2026.

Hence, the focus remains glued to the closely watched US Nonfarm Payrolls (NFP) report, due on Friday, which will play a key role in driving USD demand. Heading into the key data risk, any attempted recovery in the USD/JPY pair is more likely to be sold into amid speculation that Japanese authorities will step in to support the domestic currency. Hence, it will be prudent to wait for a breakout of a short-term range before placing fresh directional bets.

USD/JPY daily chart

Technical Analysis

The USD/JPY pair maintains a mildly bearish near-term bias following the recent repeated failures to build on gains beyond the 200-day Simple Moving Average (SMA) at 158.65. This suggests that upside momentum remains capped for now, keeping rallies vulnerable while price action consolidates below that barrier.

A daily close above this would be needed to ease the current downside bias and open the door to a more sustained recovery. On the downside, the overnight swing low, around the $157.40 area, could act as an immediate support ahead of the 157.00 mark and the lower boundary of the trading range, near the 156.65 region. A break below the latter will be seen as a fresh trigger for bears and set the stage for some meaningful depreciating move.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

US Dollar Price Last 7 Days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Australian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.88%	-1.19%	0.16%	-0.29%	0.50%	-0.27%	-1.63%
EUR	0.88%		-0.30%	1.03%	0.59%	1.38%	0.64%	-0.74%
GBP	1.19%	0.30%		1.39%	0.90%	1.68%	0.95%	-0.45%
JPY	-0.16%	-1.03%	-1.39%		-0.46%	0.31%	-0.43%	-1.80%
CAD	0.29%	-0.59%	-0.90%	0.46%		0.80%	0.04%	-1.33%
AUD	-0.50%	-1.38%	-1.68%	-0.31%	-0.80%		-0.70%	-2.11%
NZD	0.27%	-0.64%	-0.95%	0.43%	-0.04%	0.70%		-1.35%
CHF	1.63%	0.74%	0.45%	1.80%	1.33%	2.11%	1.35%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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