The yen is constrained by uncertainty surrounding the Bank of Japan's policy and is expected to remain volatile in the short term, awaiting a breakout.
2025-11-06 14:24:43
The USD/JPY pair attempted a slight rebound in Asian trading on Thursday but failed to break through the resistance zone of 154.50. Policy uncertainty at the Bank of Japan and the expansionary fiscal plans of new Prime Minister Sanae Takaichi limited the yen's strength.
The minutes of the Bank of Japan's September meeting showed that the central bank remained cautious about the path of interest rate hikes, but may return to the rate hike path in the future after achieving its 2% price stability target.
Meanwhile, Japan's Deputy Finance Minister and Head of Foreign Exchange, Mimura, pointed out that the recent yen's performance has deviated from fundamentals, with the market speculating on Japan's macroeconomic policies, especially fiscal policies. Yen bulls are cautious and lack aggressive position building.
Regarding the US dollar, it is slightly stronger in the short term, supported by strong US macroeconomic data. October's ADP private sector employment increased by 42,000 jobs, higher than the market expectation of 25,000; the ISM non-manufacturing PMI reached an eight-month high.
However, the US government shutdown has now lasted for 36 days, and the lack of official data has increased economic uncertainty, limiting the willingness of dollar bulls to increase their positions.
The daily chart shows that USD/JPY is currently consolidating within a sideways range of 153.65–154.45, with the price repeatedly testing the upper resistance level without success. The short-term moving averages of 20-day and 50-day are nearing convergence, indicating a short-term balance between bulls and bears in the market.
The RSI indicator is fluctuating around 50, and no clear trend signal has yet been formed. If the price breaks through 154.50 and holds, it may challenge 155.60-156.00 in the short term; if it falls below 153.00, the downside potential may open up to the 152.55-151.55 range.
Overall, the daily chart structure shows a slightly bullish trend with fluctuations, but it is still driven by macroeconomic events and policy uncertainties.
Editor's Note:
The USD/JPY pair is currently exhibiting a typical "policy and event-driven oscillation." Yen bulls are constrained by the Bank of Japan's cautious interest rate hikes and the Prime Minister's fiscal stimulus policies, while dollar bulls are boosted by strong US employment and economic data but simultaneously weighed down by the government shutdown. In the short term, USD/JPY is expected to remain range-bound, awaiting a directional move.
The minutes of the Bank of Japan's September meeting showed that the central bank remained cautious about the path of interest rate hikes, but may return to the rate hike path in the future after achieving its 2% price stability target.
Meanwhile, Japan's Deputy Finance Minister and Head of Foreign Exchange, Mimura, pointed out that the recent yen's performance has deviated from fundamentals, with the market speculating on Japan's macroeconomic policies, especially fiscal policies. Yen bulls are cautious and lack aggressive position building.
Regarding the US dollar, it is slightly stronger in the short term, supported by strong US macroeconomic data. October's ADP private sector employment increased by 42,000 jobs, higher than the market expectation of 25,000; the ISM non-manufacturing PMI reached an eight-month high.
However, the US government shutdown has now lasted for 36 days, and the lack of official data has increased economic uncertainty, limiting the willingness of dollar bulls to increase their positions.
The daily chart shows that USD/JPY is currently consolidating within a sideways range of 153.65–154.45, with the price repeatedly testing the upper resistance level without success. The short-term moving averages of 20-day and 50-day are nearing convergence, indicating a short-term balance between bulls and bears in the market.
The RSI indicator is fluctuating around 50, and no clear trend signal has yet been formed. If the price breaks through 154.50 and holds, it may challenge 155.60-156.00 in the short term; if it falls below 153.00, the downside potential may open up to the 152.55-151.55 range.
Overall, the daily chart structure shows a slightly bullish trend with fluctuations, but it is still driven by macroeconomic events and policy uncertainties.
Editor's Note:
The USD/JPY pair is currently exhibiting a typical "policy and event-driven oscillation." Yen bulls are constrained by the Bank of Japan's cautious interest rate hikes and the Prime Minister's fiscal stimulus policies, while dollar bulls are boosted by strong US employment and economic data but simultaneously weighed down by the government shutdown. In the short term, USD/JPY is expected to remain range-bound, awaiting a directional move.
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