The Japanese Yen gained 0.5% against the dollar as BoJ policy signals and safe-haven flows offset strong US labor data, leaving the USD/JPY pair range-bound below the 100-day SMA at 159.05.
BoJ minutes from the September meeting show most policymakers agreed further rate increases would be appropriate as underlying inflation approaches the 2% target, reinforcing December hike bets. Former BoJ economist Seisaku Kameda said Friday the BoJ is expected to hike in December and keep lifting rates toward 2% next year. Combined with haven inflows, this lifted the yen 0.5% to 157.70 per USD.
The pair slipped to near 158.25 in early Asian trading as BoJ meeting minutes from the September meeting, released Thursday, showed most policymakers see further rate hikes as appropriate, feeding December hike bets. Haven flows also favoured the JPY, with the yen appreciating 0.5% to 157.70 per USD per ABN Amro. Counteracting this, the strong US jobs report (165,000 NFP, unemployment down to 4.1%) and hawkish Daly comments support the dollar side of the pair.
The October jobs report was strong (165,000 NFP vs 65,000 expected, unemployment down to 4.1%), lifting December Fed hike odds to 79.6% from 72.8%, and Daly's hawkish tone (8/10 FXS Speechtracker) supports a firmer dollar. However, ABN Amro notes falling US yields left the DXY unchanged at 101.6 despite the equity rout, so dollar-positive and dollar-negative forces roughly offset.
The Japanese Yen strengthened to 157.70 per USD as Bank of Japan meeting minutes revealed a consensus among policymakers to accelerate monetary tightening. Despite a robust US jobs report showing 165,000 new nonfarm payrolls and a 4.1% unemployment rate, haven demand and expectations of a December BoJ hike kept the USD/JPY pair capped near 158.25.
Bank of Japan minutes show most policymakers back further rate hikes as underlying inflation nears the 2% target, and safe-haven demand during recent risk aversion has favoured the yen over the dollar.
Markets are betting on a December hike, and a former BoJ economist said the central bank is expected to raise rates in December and continue lifting them next year until they reach 2%.
The yen gained on Bank of Japan meeting minutes signalling further rate hikes and on safe-haven inflows, which outweighed dollar support from the stronger-than-expected US jobs report.
Resistance sits near 158.95 (Bollinger upper band) and the 100-day SMA at 159.05; support is at 157.95 and then around 156.95, with a break below opening a broader corrective phase.
It keeps the Fed on track for a possible December rate hike, with market odds rising to 79.6%, which supports the dollar, though falling US yields left the DXY unchanged at 101.6 despite the equity rout.