London Market — USD/JPY Falls as BOJ Governor Prepares for Rate Hike
Daily Market Analysis
Expert analysis of today's market movements and trading opportunities
Daily Market Analysis
Expert analysis of today's market movements and trading opportunities
Fundamental Analysis
- The Nikkei declined, pressured by real estate stocks, while bank stocks held firm
- USD/JPY fell toward the 155 level as expectations for a December rate hike grew
USD/JPY Daily Chart
The BOJ governor stated that the upcoming December policy meeting would include a "decision on whether to raise rates," effectively signaling the possibility of a hike. Government bond yields continue to rise, increasing upward pressure on interest rates.
The Nikkei dropped below 50,000, and USD/JPY slipped below the mid-155 range. Using Fibonacci retracement, the pair has fallen to the 23.6% level near 155.50. Growing rate-hike expectations may slow the ongoing uptrend in USD/JPY.
Whether the pair holds above the 26-day moving average will be important. The downtrend is not confirmed yet, but caution is needed.
USD/JPY Day Trading Strategy
USD/JPY fell below 156 and moved into the low-155 range. The BOJ governor's comments increased expectations for a December rate hike, looking much like preparation for tightening. A similar rise in expectations occurred last year at year-end.
Higher rates tend to weigh on stocks and can lead to a stronger yen. A one-way yen-weakening trend is unlikely for now. Additional comments from BOJ officials will be important. If the government pushes back against rate hikes, market volatility may rise.
For day trading, a wait-and-see stance is advised while watching whether the price can stay above the 26-day moving average.
Key Economic Indicators Today
| Event | Time |
|---|---|
| U.S. Manufacturing PMI | 23:45 |
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![[Special Edition] When Will the Bank of Japan's Next Rate Hike Come?](/_next/image/?url=%2Fimages%2Fmarket-analysis%2F20251031USDJPYDAY.webp&w=3840&q=75&dpl=dpl_7SfEmfY5qN3s6kwvddBMm6MTPkyg)
[Special Edition] When Will the Bank of Japan's Next Rate Hike Come?
The Bank of Japan decided to keep its policy rate unchanged at around 0.5%. Governor Kazuo Ueda stated that the BOJ would closely watch wage negotiations in next spring's "Shuntō" before making any policy changes.
USD/JPY Faces Resistance as BOJ Keeps Policy Unchanged
The Bank of Japan decided to maintain its current policy settings. Markets are focusing on whether the Governor will mention a possible rate hike in his press conference. Meanwhile, although the U.S. has already begun rate cuts, opinions differ on a possible additional cut in December.
USD/JPY Forms Double Top, Downtrend Ahead?
USD/JPY is forming a double top pattern, trading in the low 151 range. Goldman Sachs forecasts a potential return to around 100 if interest rates continue rising over the next decade. The FOMC meeting is scheduled for early tomorrow with a rate cut already priced in.
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