Japanese Yen underperforms against its peers into the weekend
- Japanese Yen weakens ahead of likely meeting between officials from Japan and the US next week.
- The US Dollar Index recovers its early losses and flattens at around 102.14.
- Strategists at BBH are upbeat on the US Dollar outlook amid strong demand for US securities.
The Japanese Yen (JPY) trades lower against its major currency peers on Friday. In the European trade, the USD/JPY pair is up 0.3% to near 158.25. The Asia-pacific currency is under pressure ahead of likely meeting between Japan and the United States (US) at the sidelines of the International Monetary Fund (IMF) during the October 12-18 period.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.01% | 0.24% | -0.02% | -0.37% | -0.23% | -0.14% | |
| EUR | 0.02% | 0.00% | 0.27% | 0.00% | -0.34% | -0.19% | -0.14% | |
| GBP | 0.01% | -0.01% | 0.27% | 0.03% | -0.34% | -0.18% | -0.08% | |
| JPY | -0.24% | -0.27% | -0.27% | -0.24% | -0.60% | -0.46% | -0.36% | |
| CAD | 0.02% | -0.00% | -0.03% | 0.24% | -0.39% | -0.23% | -0.11% | |
| AUD | 0.37% | 0.34% | 0.34% | 0.60% | 0.39% | 0.15% | 0.28% | |
| NZD | 0.23% | 0.19% | 0.18% | 0.46% | 0.23% | -0.15% | 0.12% | |
| CHF | 0.14% | 0.14% | 0.08% | 0.36% | 0.11% | -0.28% | -0.12% |
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).
US Treasury Secretary Scott Bessent and Japanese Finance Minister (FM) Satsuki Katayama have confirmed to visit the meeting. Both officials could likely talk about intervening again to support the Japanese Yen.
In late July, Japan Ministry of Finance (MoF) confirmed joint intervention by Tokyo and Washington to counter excessive volatile moves in the Asia-Pacific currency.
Meanwhile, the recovery move in the US Dollar after a weak performance in the opening trade has also lend strength to the USD/JPY pair.
As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, turns flat at around 102.14 after clawing back early losses. The DXY traded weakly due to a pullback in US Treasury Yields.
Market experts had also anticipated the US Dollar’s correction to be temporary. Strategists at Brown Brothers Harriman (BBH) observe that the recent “modest pullback in energy prices eased the global bond sell-off and took some steam out of the USD rally.” However, they caution that “US growth outperformance and strong foreign appetite for US securities keep USD risks skewed to the upside,” suggesting that the latest consolidation in the Dollar may prove temporary rather than signaling a durable shift in trend.
USD/JPY Technical Analysis
In the daily chart, USD/JPY trades at 158.25, retaining a bullish near-term bias as spot holds above the 20-day exponential moving average (EMA) at 157.58. Price action hovering over this dynamic floor suggests buyers remain in control, while the Relative Strength Index (RSI) at 55.39 stays in positive territory, hinting at mildly constructive momentum rather than overbought conditions.
On the downside, initial support is reinforced by the 20-day EMA at 157.58, where a daily close below would signal waning bullish pressure and open the way for a deeper corrective move. With no nearby technical resistance levels in the dataset, further upside appears guided primarily by momentum, and the pair could continue to grind higher as long as it defends the EMA support zone on pullbacks.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.