Hawkish BoJ Minutes: Japanese Yen Holds Firm Against Weak USD

A second consecutive day of declines leaves USD/JPY softer as hawkish BoJ minutes support the JPY.
Lower US bond yields and receding inflation concerns put pressure on the USD and spot prices.
Ahead of Friday's US NFP report, Fed rate hike expectations could cushion the USD and underpin the pair.

157.40 marked the previous day's weekly low for USD/JPY. After a sizeable rebound from that area, the pair is struggling to extend its recovery, with sellers returning for a second consecutive day on Thursday. Against a combination of negative factors, bears are waiting for a sustained break below 158.00 before positioning for additional declines.

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

Policymakers agreed that the Bank of Japan (BoJ) should continue raising its policy interest rate and adjusting the degree of monetary easing, according to minutes of its September meeting released earlier today. The minutes reinforce expectations of a December rate hike, giving the Japanese Yen (JPY) a modest boost. Combined with continued selling of the US Dollar (USD), this is putting some downward pressure on USD/JPY.

Democrats won control of both chambers of Congress in the US midterm elections, fuelling concerns over fiscal gridlock and constraints on government spending. Pledges by Democratic leaders to press for an end to the Iran war also encouraged traders to remove the geopolitical risk premium. Crude oil prices consequently slumped overnight, easing inflation concerns. US bond yields fell further as a result, leaving the USD under pressure.

Still, expectations of a hawkish US Federal Reserve (Fed) could provide a floor for the dollar and USD/JPY. Traders assign a probability of over 80% to another increase in borrowing costs in December, according to the CME Group's FedWatch Tool. 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 followed US Nonfarm Payrolls (NFP) report therefore remains the main focus and will be a key driver of USD demand. Before that major data release, recovery attempts in USD/JPY are more likely to attract selling as speculation persists that Japanese authorities will intervene to support their currency. Waiting for a break out of the short-term trading range would therefore be prudent before taking fresh directional positions.

USD/JPY: Daily Chart

Near-Term Technical Outlook

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

Only a daily close above that level would ease the prevailing downside bias and create scope for a more sustained recovery. Initial support lies near the overnight swing low around $157.40, followed by 157.00 and the trading range's lower boundary near 156.65. A break beneath the latter would provide a fresh bearish trigger and pave the way for a meaningful decline.

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

7-Day US Dollar Performance

Over the last 7 days, the US Dollar (USD) performed best against the Australian Dollar. Its percentage moves against the listed major currencies appear in the table below.

	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 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. Selecting the US Dollar on the left and following its row across to the Japanese Yen, for instance, gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.