USD/JPY rebounded on Monday, recovering about half of the losses from 22–23 October after yen buying in Tokyo dragged the pair below 157.00 to its weakest level since 18 September. The move ran from just above 156.50 to just above 157.50 and the session ended near the high, with attention turning to the Federal Reserve decision due in two days. On the charts, Monday’s peak stalled short of the 200-day EMA and the 50-day average, both sitting just under 158.00. The 22 October fall marked the first daily close below 157.00 since 18 September, while the six-month range spans from the 8 September low just under 153.00 to the July high just under 164.00.
Central Bank Policy Expectations
Policy expectations remain a key driver. The Bank of Japan lifted its rate to 1.25% from 1% in September, and Governor Ueda has indicated no need for back-to-back moves; none of the economists in a Bloomberg survey expects an October hike and most look to December. September’s decision was 7–2, with both dissents against raising rates, and previews point to any Friday dissent coming from Takata and Tamura in favour of a hike, a configuration that could pull forward December expectations.
Upcoming Economic Releases and Events
Tokyo’s October CPI and Japan’s September jobless rate are due at 23:30 GMT on Thursday, ahead of Ueda’s 06:30 GMT press conference on Friday. The Fed is expected to hold 3.75%–4.00% at 18:00 GMT on Wednesday, followed by US Q3 growth and September PCE at 12:30 GMT on Thursday.
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