USDJPY Surges as Market Anticipates Fed Decisions, Weak JPY Persists

URGENT UPDATE: The USDJPY currency pair is surging above the 155.00 handle as market dynamics shift ahead of critical economic reports and Federal Reserve (Fed) decisions. As of today, the market is reacting to mixed USD performance, driven significantly by stock market fluctuations.

In recent days, the USD has shown a net negative trend despite decreasing odds of a December rate cut. Positive performances in the stock market have correlated with rises in Treasury yields and the dollar, while downturns have prompted reversals. This relationship highlights concerns that continued stock selloffs could pressure the economy, necessitating more aggressive Fed interventions.

Market expectations indicate only a 42% chance of a rate cut in December, with the upcoming economic data poised to be decisive. Notably, the September Non-Farm Payrolls (NFP) report is due this Thursday, and while a weak report may not sway the market, a strong one could signal improving conditions prior to the Fed’s meeting.

On the Japanese yen side, the currency continues to weaken following the latest Bank of Japan (BoJ) policy decision, which left interest rates unchanged. The central bank’s Governor, Kazuo Ueda, has hinted that future hikes could be postponed until January or even March 2026, with only a 25% probability for a December hike.

Despite verbal interventions from Japanese Finance Minister, Shunichi Suzuki, aimed at stabilizing the yen around the 155.00 level, the market appears desensitized to these announcements, indicating that more substantial measures will be needed to reverse the current momentum.

Technical analysis reveals that USDJPY is trading firmly above 155.00. Buyers are likely to push for new highs as long as prices remain above this level, while sellers are eyeing a drop below it to target 151.00 support.

The 4-hour chart shows an upward trendline marking bullish sentiment. A pullback to this trendline could attract buyers, while a break lower might trigger enhanced selling pressure. On the hourly chart, sellers are poised to increase bearish momentum if prices dip below 154.80, while a surge above 155.38 could see buyers ramping up positions toward 156.00.

Today’s economic calendar includes the weekly ADP jobs data, with tomorrow expected to bring the FOMC meeting minutes. Thursday’s release of the September NFP report will be crucial, followed by Japan’s CPI report and the US Flash PMIs later this week.

As these events unfold, traders and investors are urged to stay alert to new developments that could significantly impact market dynamics.