Insights 
VT 
USD/JPY declined as demand for the Japanese yen (JPY) increased, reaching a level of 153.52. Factors like delayed Bank of Japan (BOJ) policy changes, increased fiscal burdens due to debt servicing, and a potential early election contribute to possible downward pressure on JPY.
For USD/JPY to decrease further, a weaker USD and a more proactive BOJ stance are needed. The daily chart shows fading bullish momentum, and the Relative Strength Index (RSI) indicates a downturn from near overbought conditions. Current support is at 152.40 and 151.60, with resistance at 154.40.
Currency Movements
Other currency movements include USD/CNH potentially rising to 7.1390 and EUR/USD trading below 1.1500. GBP/USD remains stable above 1.3000 after a recent decline. Gold remains under $4,000 despite some modest gains, reflecting market cautiousness.
The ADP Employment Report is expected to show October added 24,000 new jobs. Upcoming US data and Federal Reserve discussions may challenge the US Dollar’s strength. The week ahead sees varied currency paths, with central bank meetings in focus. Stellar (XLM) risks further losses as it breaks out of a channel pattern amid waning retail demand.
Given the current risk-off environment as of November 5th, 2025, we are seeing the USD/JPY pair drift lower towards 153.50. This pullback from the year’s highs is a signal for traders to reassess long positions. The fading momentum on the daily charts suggests that options favouring a stronger yen or a move down towards the 152.40 support level could be prudent in the coming weeks.
US Dollar and Yen Factors
The case for a softer US dollar is building, which would accelerate this downward move. We’ve just seen the US ADP report for October come in at 15,000 jobs, missing the 24,000 expectation and reinforcing signs of a cooling labor market. This weak data supports the view that the Fed might cut rates in December, with markets now pricing in over a 70% chance according to futures data.
On the yen side, fears of direct intervention from the Ministry of Finance have lessened as we pull back from the year’s highs above 160, a level that triggered action back in 2024. However, with core inflation in Tokyo recently ticking up to 2.9% last month, pressure remains on the Bank of Japan to signal a firmer commitment to policy normalisation. Any hawkish commentary from the central bank would likely strengthen the yen further.
This suggests a period of higher volatility, making options strategies attractive for managing risk around key data points. We must watch for upcoming Fedspeak and the US ISM Services report for more clues on the dollar’s direction. The potential for a snap election in Japan also remains a wildcard that could introduce sudden downward pressure on the yen if political instability increases.
