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Forex Today: Japanese Yen under pressure to start week, eyes on US T-note auctions
Here is what you need to know on Monday, October 28:
The Japanese Yen struggles to find demand to start the week as markets assess the outcome of the Japanese general election. The Federal Reserve Bank of Dallas' Texas Manufacturing Business Index for October will be the only data featured in the US economic docket. Later in the American session, the US Treasury will hold 2-year and 5-year note auctions.
Japanese Yen PRICE Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | 0.03% | 0.11% | -0.02% | 0.17% | 0.27% | 0.08% | |
| EUR | -0.01% | 0.13% | 0.02% | -0.01% | 0.26% | 0.25% | 0.08% | |
| GBP | -0.03% | -0.13% | 0.72% | -0.04% | 0.16% | 0.21% | 0.19% | |
| JPY | -0.11% | -0.02% | -0.72% | -0.06% | -0.58% | -0.58% | -0.52% | |
| CAD | 0.02% | 0.01% | 0.04% | 0.06% | 0.14% | 0.21% | 0.10% | |
| AUD | -0.17% | -0.26% | -0.16% | 0.58% | -0.14% | -0.01% | -0.17% | |
| NZD | -0.27% | -0.25% | -0.21% | 0.58% | -0.21% | 0.01% | -0.21% | |
| CHF | -0.08% | -0.08% | -0.19% | 0.52% | -0.10% | 0.17% | 0.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Japan’s Liberal Democratic Party, which has been in power since 1955, has lost its majority for the first time in 15 years at Sunday's national election, prompting concerns about the world's fourth-largest economy and the uncertainty over the make-up of the next government. According to NHK, the ruling Liberal Democratic Party and its coalition partner Komeito won just 215 of the lower house's 465 seats, falling short of the 233 required for a majority. The main opposition, the Constitutional Democratic Party of Japan (CDPJ) won 148 seats, a significant increase from 98.
USD/JPY started the week with a bullish gap following this development and touched its highest level in nearly three months near 154.00. At the time of press, the pair was trading slightly below 153.50, rising about 0.7% on the day. Highlighting the selling pressure surrounding the Japanese Yen, the EUR/JPY cross was last seen gaining more than 0.6% at 165.50 and GBP/JPY was up 0.7% at 198.70.
Following Thursday's correction, the US Dollar (USD) Index regained its traction and closed in positive territory on Friday, gaining more than 0.8% for the week. Early Monday, the index edges higher toward 104.50. Meanwhile, US stock index futures trade in positive territory, reflecting an improving risk mood.
EUR/USD extended its downtrend on Friday and registered losses for the fourth consecutive week. The pair trades in a tight range near 1.0800 in the European morning on Monday.
GBP/USD lost its recovery momentum on Friday and ended the day marginally lower. The pair stays in a consolidation phase at around 1.2950 to begin the European session.
Gold gathered bullish momentum and posted daily gains after falling below $2,720 in the European session on Friday. XAU/USD struggles to gather directional momentum and moves sideways below $2,750 early Monday.
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.
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