In November, Japan’s overall household spending increased by 2.9% year-on-year. This rise exceeded expectations, which had forecasted a 0.9% decrease.
The Australian dollar maintained stability even though China’s inflation figures did not meet expectations. In currency markets, USD/CHF remained stable near 0.8000 due to increased demand for the Swiss franc as a safe haven.
Japanese Yen Performance
The Japanese yen continued to hover near weekly lows against the US dollar, despite favourable spending data from Japan. Meanwhile, the EUR/JPY climbed above 183.00, testing a nine-day exponential moving average barrier.
In other developments, USD/CAD was trading around 1.3900 as markets awaited employment data from the US and Canada. The US Dollar Index rose to near 99.00 in anticipation of the US Nonfarm Payrolls.
Gold prices faced resistance near $4,500, with future movements dependent on US Nonfarm Payrolls and a Supreme Court ruling. JasmyCoin, Polygon, and Monero experienced gains, while XRP declined due to reduced demand in both institutional and retail sectors.
Focus On US Nonfarm Payrolls
All attention is on the upcoming US Nonfarm Payrolls (NFP) report, with the US Dollar Index already climbing towards 99.00. The forecast for December 2025 job gains is a meager 60,000, a sharp drop from the robust monthly additions often exceeding 200,000 that we saw back in 2024. Given these low expectations, any figure that beats the forecast could trigger a sharp upward move in the dollar, suggesting put options on EUR/USD may be a prudent hedge.
Japan’s surprise 2.9% rise in household spending for November 2025 has failed to strengthen the yen, which is struggling near its weekly lows against the dollar. The currency’s weakness is broad, with EUR/JPY now trading above 183.00, confirming that the Bank of Japan’s interest rate policy is the market’s primary focus. We believe this divergence between strong domestic data and a weak currency will continue, making yen-funded carry trades attractive.
The dollar’s dominance is also pressuring other major currencies, with GBP/USD slipping towards the 1.3400 mark. This unabated selling pressure reflects the market’s broader risk-off sentiment as traders await clarity from the US labor market. Until the NFP numbers are released, we see little reason to fight the prevailing trend of dollar strength against both the euro and the pound.
Gold is consolidating near the $4,500 level, a price that underscores the significant economic shifts we experienced throughout 2025. A weaker-than-expected NFP result would likely be bullish for gold, as it would increase speculation that the Federal Reserve may have to alter its policy outlook. Traders should prepare for heightened volatility, as a decisive move in gold will likely follow the release of the US employment figures.
