The yen is consolidating above 155 per dollar as market participants await the August US jobs report. Federal Reserve Governor Christopher Waller highlighted next week’s CPI, and Fed funds futures have trimmed the odds of a rate hike this week, according to the analysis.
The dollar’s two‑day rise to near JPY156.60 in Europe is attributed by most commentators to hawkish remarks from the Bank of Japan and speculation of faster BOJ tightening, rather than direct intervention. The yen remains the weakest G10 currency, down just over one‑third of one percent.
EUR/USD fell to a two‑week low of $1.1565 on Wednesday before climbing to almost $1.1645, its best level since the Jackson Hole comments. The pair is now trading below its 200‑day moving average around $1.1635, with about $2.6 billion of options set to expire at the 155‑yen level.
GBP/USD experienced a broad decline of roughly 2%, settling more than three standard deviations below its 20‑day moving average. The analysis notes that large pools of capital, possibly including Japan’s Government Pension Investment Fund, may have been buying back short yen positions. The pair could test the JPY157.00‑25 area if the move continues.
The greenback peaked at CAD1.3940, its highest since August 13, before testing CAD1.3765 and settling around CAD1.3760 ahead of the US and Canadian employment reports. Options worth about $1.2 billion at CAD1.3800 expire today.
AUD/USD recovered from around $0.7120 on Wednesday to a high near $0.7205, briefly touching $0.7225, its best level since early May. Approximately A$1.3 billion of options at $0.7200 are set to expire.
Emerging‑market currencies held up, though the Mexican peso slipped below MXN16.94 for the first time since August 26, reaching a two‑day low near MXN16.8875. The Chinese yuan fell to a new three‑and‑a‑half‑year low of CNY6.7085, prompting the People’s Bank of China to set the daily reference rate below CNY6.78 for the first time since February 2023. The Indian rupee edged up to INR94.5050.
Equity markets rose, with the S&P 500 and Nasdaq futures gaining and Europe’s Stoxx 600 firming. Benchmark 10‑year yields fell 3‑5 basis points in Europe, while the US 10‑year Treasury yield slipped to just below 4.76%. The UK gilt yield fell nearly 10 bp, the Swiss bond edged above 0.4%, and the Japanese 10‑year JGB yield dropped four basis points.
Gold traded above $4,500 for the first time this week after briefly dipping below $4,283, staying between $4,460 and $4,500. The analysis suggests a break above $4,330‑$4,340 could signal a move toward $4,700. Silver hovered just below $67. Oil prices steadied, with October WTI futures holding above $90 and settling near $93.15.
The key market event is the US jobs report. Bloomberg’s median forecast calls for a 55,000‑job increase, with downside risk stemming from state and local government hiring, particularly in education. Historical August reports have often missed expectations, and July’s preliminary estimate indicated a loss of 23,000 jobs.
