ForexLive Asia-Pacific FX news wrap: USD/JPY back below 155.00, Bitcoin above 96K

The Japanese yen rose to around 155 per dollar on Thursday, recovering some ground after losses in the previous session.

However, uncertainty surrounding the Bank of Japan’s future interest rate hikes continued to weigh on the currency.

BOJ Governor Kazuo Ueda suggested on Monday that any rate hikes would be gradual, depending on economic conditions, but he provided no specific timeline for when such hikes might occur.

Meanwhile, recent verbal warnings from Japanese authorities appeared less effective in curbing market concerns, with traders eyeing the 160 level as a potential trigger for further government intervention.

Investors are now awaiting Japan's October inflation data, due for release on Friday, to help shape the economic outlook.

Meanwhile, the yen remains under pressure from the US dollar, bolstered by expectations that Trump’s policies could reignite inflation and limit future interest rate cuts by the Federal Reserve.

Markets:

• Gold up $16.73 or 0.63% had $2648.75
• US 10-year yield 4.415%, +3.7 basis points
• US 2-year yield 4.320%, +4.9 basis points
• WTI crude oil down nine cents at $69.08
• S&P 500 unchanged
• NASDAQ fell -0.11%
• Russell 2000 unchanged
• Dow up 0.32%

The US dollar moved back higher after a few days of declines. The dollar index (DXY) rose 0.46%

• EUR, +0.52%
• JPY +0.53%
• GBP, +0.28%
• CHF +0.25%
• CAD +0.18%
• AUD +0.44%
• NZ +0.66%D

The economic calendar was void of any economic releases today. However, there was two Fed Governors who spoke. FIrst Feds Lisa Cook spoke and was ambidextrous in her economic and policy views. She said:

Later Fed's Michelle Bowman also spoke, but her comments were more hawkish:

The US treasury auctioned $16 billion of 20 year bonds and the usual 1 PM, and investors did not show up. The auction high yield came in 3.0 basis points above the WI level at the time of the auction. The Bid to cover was below the six-month average and the dealers were saddled with a whooping 22.6% of the auction versus the six-month average of 11.2%. UGLY.

Yields moved higher today help by a comments mostly from Bowman along with the poor auction results. A snapshot of the market shows:

• 2-year yield 4.305%, +3.4 basis points
• 5- year yield 4.273%, +2.5 basis points
• 10 year yield 4.406%, +2.7 basis points
• 30 year yield 4.591%, +2.6 basis points

In Europe, ECB's Stournaras stated that the ECB's monetary policy has successfully tamed inflation and expects it to converge to the 2% target by early 2025. He emphasized the need for the ECB to avoid an inflation undershoot as conditions evolve. Stournaras noted that interest rates are likely to remain restrictive for an extended period, but sees given persistent downside risks to Eurozone growth (so why keep rates restrictive?).

Technically speaking:

EURUSD: The EURUSD started the day with a modest extension higher that took the price to the high of a swing area target at 1.06097. The price also got closer to its falling 200-hour moving average. That moving average currently comes in 1.05958. The subsequent fall to the price below its 100 hour moving average at 1.05617. A correction after the break tried to extend back above that moving average level, but quickly reversed. That push the pair back down toward the low from last Friday's trade at 1.04956. The low price reach 1.0506 which was good enough for a new low for the day and week, but momentum cannot be sustained in the price bounced back higher into the close. The current price is trading at 1.0534. That is below the 100-hour moving average of 1.05617, but above the low price from last Friday and lowest level for the year (going back to October 2023).

USDJPY: The USDJPY higher in the Asian session and in the process extended above its 100 hour moving average currently at 155.00. The high price extended to 155.88 before rotating back to the downside and to the 100 hour moving average. Support buyers leaned against that level and pushed the price modestly off of the key moving average level at 155.40 currently. Going in the new day, the 100 hour moving average will be a key barometer. Stay above that level (at 155.00) and the buyers are in control. Move below and then below the 200 hour moving average of 154.697, and the sellers take more control in the short term.

GBPUSD: The GBPUSD moved higher earlier in the day and tested the high price from last Friday's trade near 1.2719. The high price today reached 1.2714 and found one sellers. The subsequent fall took the price below its 100 hour moving average of 1.2657 where the price has remained into the close. That moving average will be the short-term bias defining level for both the buyers and sellers. Stay below is more bearish. Move above is more bullish at least in the short term. On the downside, the low price yesterday stalled near 1.2612. The low price from last Friday reached 1.2596. Move below those levels opens the door for further selling.

AUDUSD The AUDUSD moved higher in the early Asian session and in the process extended above its falling 200 hour moving average:. However, momentum could not be sustained the price spent the US session moving down to a new wall at and technical target at its 100 hour moving average. Support buyers leaned against the level and bounced modestly into the end of day. The 100 hour moving average comes in at 0.6488. Moving below that level and staying below that level in the new trading day would be more bearish. Conversely, staying above and extending above the falling 200 hour moving average (currently at 0.65124) would give the buyers some added confidence.

Good fortune with your trading.

Headlines:

• Dollar holds firmer in European morning trade
• USDJPY Technical Analysis – The JPY remains the weakest among the majors
• S&P 500 Technical Analysis – The path of least resistance remains to the upside
• ECB's de Guindos: Current low growth environment has more to do with structural policy
• ECB sounds warning on "bubble" in AI stocks in latest financial stability review
• UK October CPI +2.3% vs +2.2% y/y expected
• Eurozone negotiated wage growth seen accelerating in Q3
• Germany October PPI +0.2% vs +0.2% m/m expected
• US MBA mortgage applications w.e. 15 November +1.7% vs +0.5% prior
• Economists see Trump tariffs to cut China GDP by around 0.5% to 0.9% next year
• Xi calls on Scholz to reconcile issue of EU tariffs on Chinese EVs

Markets:

• USD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.2%
• US 10-year yields up 5.1 bps to 4.429%
• Gold down 0.1% to $2,628.43
• WTI crude up 0.5% to $69.76
• Bitcoin up 1.4% to $93,583

The dollar is starting to perk up again in trading today, following a bit of a breather in the past two days.

There wasn't much to trigger the dollar gains as traders just fell back to the post-election mood in the European morning session. USD/JPY was an early mover, gaining to around 155.20 in the handover from Asia before extending gains to around 155.80 currently.

That comes as bond yields are also tracking higher on the day. And it wasn't long before the dollar caught stronger bids across the board.

EUR/USD moved down from 1.0580 to 1.0550 while GBP/USD is pulled lower from 1.2700 after a hotter UK CPI report to 1.2665 currently.

Elsewhere, USD/CAD is back up by 0.3% to near 1.4000 while AUD/USD is down 0.5% to test the 0.6500 mark once more.

Looking to broader markets, equities are cautiously higher with watchful eyes on Nvidia's earnings after the close. Meanwhile, gold is marginally lower as the dollar and higher yields are keeping the rebound this week in check for a bit.

Besides that, Bitcoin is also seeing renewed bids amid the return to the post-election mood, at least for now. The cryptocurrency is seen up over 1% above $93,500.

After a bit of a pause in the last few days, the dollar is starting to flex its muscles once again. The greenback is sitting atop the major currencies bloc, now extending gains across the board on the day. USD/JPY already traded a little higher earlier but now other dollar pairs are catching up. EUR/USD is currently seen down by 0.4% to 1.0556:

EUR/USD hourly chart

The pair did break below its 100-hour moving average (red line) yesterday but it owed to risk-off flows, arguably driven by geopolitical headlines. That reversed course later in the day but now, we're seeing steady flows to nudge the pair back below the key near-term level again.

Hold below that and sellers will reestablish a more bearish near-term bias in the pair. So, that's a key technical development to be mindful of.

Elsewhere, USD/JPY is now up 0.7% to 155.80 while AUD/USD is down 0.4% to 0.6510 on the day. The dollar is seen firming here as bond yields are also pushing higher. 10-year Treasury yields are now up over 4 bps on the day to 4.42% on the session.

Are we starting to swing back to the post-election momentum after catching a breather?