No Yen Strength Despite Risk-Off Mood

Fundamental Analysis

• Bond yields hit a 17-year high as selling pressure continues
• Nikkei plunges; bonds fall; yen weakens — a triple decline
• Concerns grow over the Kishida administration's expansionary fiscal policy

Japanese Bond Yields Rise

Japan's government bond yields are rising, meaning bonds are not being bought and prices keep dropping. This reflects investor concern about Japan's fiscal condition. Without higher yields, bonds no longer attract buyers, showing a decline in national creditworthiness.

U.S. stocks are also falling sharply, pulling the Nikkei lower. However, declines caused by Japan–China diplomatic tensions may eventually calm down. The bigger long-term concern is the growing worry over Japan's fiscal expansion.

USD/JPY has broken above the upper line of its rising wedge, and 154.80 yen is acting as a support line, suggesting the long-term trend continues to favor yen weakness.

USD/JPY Day Trading Strategy

USD/JPY broke above 155 and reached 155.60. Some profit-taking has emerged, but buying interest is expected to strengthen around the low 155 yen range. Expectations for U.S. rate cuts have weakened, supporting dollar buying. As long as U.S. rate-cut expectations remain low, USD/JPY is likely to stay in a gentle uptrend.

A pullback to around 154.90–155.10 would be a buying opportunity.

Today's Key Indicators

Note: Due to the U.S. government shutdown, U.S. data releases may be delayed.

Indicator / Event	Time
U.K. CPI	16:00
Eurozone CPI	19:00
U.S. FOMC Minutes	04:00 (next day)