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Forex Today: Japanese Yen selling pauses, market attention shifts to PMI data
Here is what you need to know on Thursday, October 24:
After suffering large losses against its major rivals on Wednesday, the Japanese Yen (JPY) stages a rebound early Thursday. S&P Global will release preliminary October Manufacturing and Services Purchasing Managers' Index (PMI) data for Germany, the Eurozone, the UK and the US later in the session. The US economic calendar will also feature weekly Initial Jobless Claims data and New Home Sales figures for September. In the meantime, market participants will continue to scrutinize comments from central bank officials.
Japanese Yen PRICE This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.77% | 0.89% | 1.77% | 0.12% | 0.92% | 0.86% | 0.26% | |
| EUR | -0.77% | 0.05% | 0.92% | -0.60% | 0.13% | -0.02% | -0.55% | |
| GBP | -0.89% | -0.05% | 0.85% | -0.77% | 0.03% | -0.04% | -0.67% | |
| JPY | -1.77% | -0.92% | -0.85% | -1.64% | -0.83% | -0.83% | -1.53% | |
| CAD | -0.12% | 0.60% | 0.77% | 1.64% | 0.72% | 0.80% | 0.02% | |
| AUD | -0.92% | -0.13% | -0.03% | 0.83% | -0.72% | 0.01% | -0.72% | |
| NZD | -0.86% | 0.02% | 0.04% | 0.83% | -0.80% | -0.01% | -0.64% | |
| CHF | -0.26% | 0.55% | 0.67% | 1.53% | -0.02% | 0.72% | 0.64% |
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).
USD/JPY extended its uptrend and touched its highest level since late July above 153.00, gaining more than 1% on Wednesday. Reflecting the broad-based selling pressure surrounding the JPY, EUR/JPY rose 0.95% and GBP/JPY added 0.6%. Early Thursday, USD/JPY corrects lower and was last seen losing 0.35% on the day below 152.50.
Speaking on the policy outlook late Wednesday, Bank of Japan (BoJ) Governor Kazuo Ueda noted that it's taking time for them to get to the 2% inflation target in a sustainable manner. "It's very hard to pin down the appropriate size of rate hikes from here," he added. Meanwhile, Japan’s Finance Minister Katsunobu Kato refrained from commenting on a possible intervention in foreign exchanged markets, reiterating that it's desirable for currencies to move stably, reflecting economic fundamentals.
Following its October meeting, the Bank of Canada (BoC) decided to lower the policy rate by 50 basis points to 3.75% as expected. In the post-meeting press conference, BoC Governor Tiff Macklem said that the shelter price inflation has started to come off, increasing their confidence that it will gradually continue to ease. USD/CAD stretched higher following the BoC event and touched its highest level since early August above 1.3860. The pair stays on the back foot early Thursday and declines toward 1.3800.
EUR/USD continued to push lower and closed the third consecutive day in the red on Wednesday. The pair recovers modestly in the European morning but stays below 1.0800.
GBP/USD lost 0.5% on Wednesday and came in within a touching distance of 1.2900. The pair edges higher toward 1.2950 to start the European session.
Gold climbed toward $2,760 and set a new all-time high during the European trading hours on Wednesday. As the benchmark 10-year US Treasury bond yield rose to a three-month high above 4.25%, however, XAU/USD lost its traction and ended the day with a loss of more than 1%. The precious metal regains its traction and trades in positive territory above $2,730.
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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