Japanese Yen retains its edge against weak USD following hawkish BoJ Minutes

USD/JPY extends its decline into a second day, with hawkish BoJ Minutes lending support to the JPY.
The USD and spot prices remain under pressure as inflation worries recede and US bond yields fall.
Ahead of Friday's US NFP release, expectations of a Fed rate hike could cushion USD losses and lend support to the pair.

Selling pressure persists in USD/JPY for a second consecutive day on Thursday, leaving the pair unable to build on the previous day's sizeable recovery from the 157.40 area, its weekly low. With several factors weighing on the pair, bearish traders are waiting for a sustained move below 158.00 before positioning for additional declines.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

The Japanese Yen (JPY) receives modest support from renewed expectations of a December rate hike after the Bank of Japan's (BoJ) September meeting minutes were released earlier today. Policymakers agreed that continuing to raise the policy interest rate and adjusting the degree of monetary easing remained appropriate. Alongside persistent selling of the US Dollar (USD), this is putting some downward pressure on USD/JPY.

Concerns over fiscal gridlock and constraints on government spending emerged after Democrats won control of both chambers of Congress in the US midterm elections. Democratic leaders also pledged to press for an end to the Iran war, leading traders to remove the geopolitical risk premium from prices. Crude oil consequently slumped overnight, easing inflation concerns. The resulting further decline in US bond yields left the USD under pressure.

A potential cushion for the USD and USD/JPY, however, comes from hawkish expectations for the US Federal Reserve (Fed). The CME Group's FedWatch Tool shows traders assigning a probability of over 80% to another increase in borrowing costs by the US central bank in December. Wednesday's stronger-than-expected US ADP report reinforced those expectations, showing an increase of 86,000 in private-sector employment in October 2026.

Friday's closely tracked US Nonfarm Payrolls (NFP) report therefore remains the key focus, with the release set to play an important role in shaping USD demand. Before that major data event, attempts at a USD/JPY recovery are more likely to attract selling as speculation persists that Japanese authorities will intervene to support their currency. Waiting for a breakout from the short-term trading range would therefore be prudent before taking fresh directional positions.

USD/JPY: daily chart

Technical Outlook: Can USD/JPY Overcome Its Bearish Bias?

Repeated recent failures to extend gains above the 200-day Simple Moving Average (SMA) at 158.65 leave USD/JPY with a slightly bearish near-term outlook. While the pair consolidates below this hurdle, upward momentum appears constrained and rallies remain vulnerable.

To reduce the prevailing downside bias and pave the way for a more lasting recovery, the pair would need a daily close above that level. Initial support on the downside could come from the overnight swing low around the $157.40 area, followed by 157.00 and the trading range's lower boundary near 156.65. A breach of the latter would provide a fresh bearish trigger and open the way for a sizeable decline.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

How Has the US Dollar Performed Over the Last 7 Days?

The US Dollar recorded its strongest performance against the Australian Dollar over the last 7 days. The table below sets out the percentage changes in the US Dollar (USD) against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.88%	-1.19%	0.16%	-0.29%	0.50%	-0.27%	-1.63%
EUR	0.88%		-0.30%	1.03%	0.59%	1.38%	0.64%	-0.74%
GBP	1.19%	0.30%		1.39%	0.90%	1.68%	0.95%	-0.45%
JPY	-0.16%	-1.03%	-1.39%		-0.46%	0.31%	-0.43%	-1.80%
CAD	0.29%	-0.59%	-0.90%	0.46%		0.80%	0.04%	-1.33%
AUD	-0.50%	-1.38%	-1.68%	-0.31%	-0.80%		-0.70%	-2.11%
NZD	0.27%	-0.64%	-0.95%	0.43%	-0.04%	0.70%		-1.35%
CHF	1.63%	0.74%	0.45%	1.80%	1.33%	2.11%	1.35%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the US Dollar on the left and following its row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.