— USD/JPY Stalls in the Upper 155s as the Tug-of-War Over Yield Differentials Continues —
■ Overall Market: Post-FOMC Volatility Fades, Markets Enter a Calm Phase
With the FOMC now behind us, the FX market is gradually regaining stability.
Immediately after the meeting, the U.S. dollar came under pressure following the rate cut decision and the policy stance on short-term Treasury purchases. However, that initial move has since faded.
In New York trading, USD/JPY slipped below 155.00 and briefly dipped into the upper 154s after U.S. initial jobless claims deteriorated more than expected. That decline, however, proved short-lived as:
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The decline in U.S. yields stalled
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Short-term traders adjusted positions
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Weekend-related position squaring emerged
Together, these factors triggered a bout of dollar buying.
During the Tokyo session, USD/JPY gradually recovered and is now hovering in the upper 155s, searching for direction.
■ USD/JPY: Limited Upside and Downside, Lacking a Clear Catalyst
USD/JPY has entered a phase where it is difficult to establish a clear trend.
Factors capping the upside:
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U.S. rate cuts are becoming a reality
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Growing caution ahead of next week’s Bank of Japan policy meeting
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Expectations that the U.S.–Japan yield differential will narrow over the medium term
Factors supporting the downside:
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Scope for a technical rebound after the sharp drop
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Short-covering by speculative players
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Intermittent real-money demand for dollars
These opposing forces are keeping USD/JPY range-bound, centered around the upper 155s.
📌 Expected Range
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Support: around 155.30
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Resistance: around 155.90
Note: Selling pressure is likely to emerge near the 156.00 level.
■ Euro & Yen Crosses: A Dollar-Led Consolidation Phase
EUR/USD remains subdued in the low 1.17s.
While the broader dollar-weakness trend remains intact, the pair has entered a post-FOMC consolidation phase, limiting upside momentum.
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The base scenario is range trading centered around the 1.17 handle
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A strong “wait-and-see” tone dominates as markets await fresh catalysts
EUR/JPY is trading around the mid-182s, moving largely in tandem with USD/JPY.
Attention remains on yen-driven moves, as sensitivity to USD/JPY fluctuations stays high.
■ Pound Sterling: Weak UK Data Weighs on the Upside
In the UK, October GDP came in below expectations, showing negative growth and weighing on sterling.
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GBP/USD softened from the upper 1.33s
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EUR/GBP edged higher
Concerns over a slowdown in the UK economy have resurfaced, and with expectations of BOE rate cuts still lingering, the pound remains vulnerable to selling on rebounds.
■ Key Focus Today: Central Bank Commentary Over Data
While today’s economic data calendar is relatively light, comments from U.S. central bank officials are likely to provide the next directional cues.
Scheduled speakers:
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Philadelphia Fed President
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Cleveland Fed President
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Chicago Fed President
Remarks from officials who hold voting rights in next year’s FOMC are particularly important.
Depending on the tone of these comments, markets could see:
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A renewed decline in U.S. yields
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A re-ignition of dollar selling pressure
■ Summary: Direction Awaits the Next Catalyst
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Initial post-FOMC moves have largely run their course
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USD/JPY is consolidating in the upper 155s
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Expectations of a narrowing U.S.–Japan yield gap continue to cap upside
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At the same time, corrective rebounds remain likely after the recent drop
👉 For now, a wait-and-see stance appears to be the most prudent approach.
👉 A clearer directional move is likely to emerge only after:
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The BOJ meeting
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Upcoming U.S. economic data
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Further commentary from Fed officials
