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: 2025.10.03
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USD/JPY gains traction above 147.00 as US Dollar rebounds
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USD/JPY gains traction above 147.00 as US Dollar rebounds
New
2025.10.03 08:06
2025.10.03 08:06
2025.10.03 08:06
- USD/JPY rebounds to around 147.20 in Friday's early Asian session.
- Traders weighed the impact of a US government shutdown.
- The Liberal Democratic Party leadership election on Saturday will be closely watched.
The USD/JPY pair recovers some lost ground near 147.20, snapping the four-day losing streak during the early Asian session on Friday. The potential upside for the pair might be limited as traders continue to assess the impact of a US government shutdown. The US September Nonfarm Payrolls (NFP) report will not be published in light of the ongoing federal shutdown, while the ISM Services PMI and the final S&P Global Services PMI should be published as usual.
US government agencies began shutting down after President Donald Trump's Republican Party failed to agree with opposition Democrats on a way forward on a spending bill. This, in turn, drags the USD lower against the JPY. Additionally, the downbeat US economic data undermines the Greenback as the ADP National Employment report showed private payrolls declined by 32,000 in September, boosting expectations that the Federal Reserve (Fed) will cut interest rates two more times this year.
Markets expect a 25 basis points (bps) cut at the Fed's October meeting and are currently pricing in a 90% chance of an additional reduction in December, according to the CME FedWatch Tool.
On the other hand, political uncertainty in Japan could weigh on the Japanese Yen (JPY) and create a tailwind for the pair. The ruling Liberal Democratic Party (LDP) prepares to elect its new leader this weekend. The new Prime Minister will influence the trajectory of Japan's fiscal policy, which could further determine the Bank of Japan's (BoJ) policy stance and drive the JPY in the near term.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world's most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan's policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan's mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ's stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as 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. Turbulent times are likely to strengthen the Yen's value against other currencies seen as more risky to invest in.
Last updated
: 2025.10.03
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EUR/USD steadies as Fed divide offsets shutdown drag
EUR/USD consolidates on Friday amid a quiet trading session due to the lack of a fresh catalyst, sponsored by a US government shutdown that seems poised to extend beyond the current week. The pair trades at 1.1738, up 0.28%, at the time of writing.
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2025.10.04 06:12Fed's Miran insists Fed has room for more cuts
Federal Reserve (Fed) Board of Governors plant Stephen Miran doubled down on his belief that the Fed has a lot more room to cut its way to neutral interest rates.
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2025.10.04 04:59Fed's Jefferson nods to risks on both sides of the Fed's mandate
Federal Reserve (Fed) Vice President and Board of Governors member Phillip Jefferson acknowledged that ongoing risks to both sides of the Fed's policy mandates are seeing growing risks.
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2025.10.04 03:56Gold climbs as shutdown fuels haven demand, eyes record high
Gold price advances during the North American session on Friday, up by 0.70% for the day as the US government shutdown extends to three days, poised to end the week positively for the seventh straight week. At the time of writing, XAU/USD trades at $3,882 after hitting a daily low of $3,838.
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2025.10.04 03:54Fed's Logan warns inflation pressures persist, could be made worse
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2025.10.04 03:49Dow Jones Industrial Average rises 300 points on Friday
The Dow Jones Industrial Average (DJIA) caught a firm bid on Friday, rising 482 points, or 1.04%, bottom-to-top. The Dow briefly pierced the 47,000 major price handle for the first time ever, before easing back to a more sedate +300 points (0.65%) on the day.
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2025.10.04 03:44AUD/USD holds near 0.6600 as Greenback weakens on US shutdown and soft PMI data
The Australian Dollar (AUD) holds modest gains versus the US Dollar (USD) on Friday, supported by a weaker Greenback as the United States (US) government shutdown drags on and the ISM Services Purchasing Managers Index (PMI) softens.
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2025.10.04 03:23EUR/USD holds modest bid amid US shutdown and mixed PMI readings
The Euro (EUR) trades with a modest bid against the US Dollar (USD) on Friday, with EUR/USD stuck in this week's range of 1.1750-1.1700.
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2025.10.04 00:38GBP/USD rises as US shutdown prolongs, Fed data gap grows
The Pound Sterling advances some 0.26% on Friday as the US government began its third day of shutdown and skipped the release of Nonfarm Payroll figures for September. Purchasing Managers Index (PMI), data from S&P Global and ISM in the US, are the main drivers of price action.
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2025.10.04 00:36EUR/JPY rebounds after dip to one-month low
The Euro (EUR) gains traction against the Japanese Yen (JPY) on Friday, recovering after briefly slipping to its lowest level since September 9 on Thursday. At the time of writing, EUR/JPY trades near 173.00, staging a modest rebound from recent lows.
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2025.10.03 23:08Disclaimer:
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