The Japanese Yen (JPY) nurses marginal losses against the US Dollar (USD) on Monday but remains trading within previous ranges, with downside attempts limited as Japanese Prime Minister Sanae Takaichi pledged to keep public debt under control. The USD/JPY is trading around 158.00 at the European session opening,with the broader bearish trend still intact as the US Dollar rallies across the board.
Prime Minister Sanae Takaichi promised that the government will control debt issuance and "scrutinise the economy, prices, tax revenues, interest rates, debt-servicing costs, and market developments”, in an extraordinary speech to the parliament, as Japan’s borrowing costs surged to record highs with the bond markets' turmoil worsening.
Takaichi also pledged a five-year investment plan that will be released by the end of the year, and vowed to “enhance market trust” in their policies by “communicating closely with the public, domestic and overseas players.”
Almost at the same time, the Japanese Cabinet Office revealed that Consumer Confidence ticked down to 35.4 in September from 35.5 in August, a tad better than the 35.3 reading expected by the market.
In the US, Nonfarm Payrolls data disappointed on Friday and practically discarded any interest rate hike by the US Federal Reserve (Fed) in October. The US Dollar, however, maintains its bid tone, fuelled by its safe-haven status, as borrowing costs surge across the globe, with high oil prices fuelling inflationary pressures.
According to TD Securities, "September payrolls surprised to the downside last week, but the details showed underlying strength," as the moderation in job gains was "largely driven by seasonal factors — especially in leisure & hospitality." All in all, TD experts see the US labor market broadly resilient despite the monthly slowdown.
Later in the day, US "ISM services likely reversed its unexpected August gain, falling to a below-consensus 54.0 in September," and anticipates that "the recently strengthening new orders and activity components" will "lead the reversal," say TD Securities in a note.
The Consumer Confidence released by the Cabinet Office captures the level of sentiment that individuals have in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn. Normally, a result above 50 is positive (or bullish) for the JPY, whereas a result below 50 is seen as bearish.
Read more.Last release: Mon Oct 05, 2026 05:00
Frequency: Monthly
Actual: 35.4
Consensus: 35.3
Previous: 35.5
Source: Japanese Cabinet Office
The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector, which makes up most of the economy. The indicator is obtained from a survey of supply executives across the US based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Mon Oct 05, 2026 14:00
Frequency: Monthly
Consensus: 55.7
Previous: 55.4
Source: Institute for Supply Management
The Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) reveals the current conditions in the US service sector, which has historically been a large GDP contributor. A print above 50 shows expansion in the service sector’s economic activity. Stronger-than-expected readings usually help the USD gather strength against its rivals. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are also watched closely by investors as they provide useful insights regarding the state of the labour market and inflation.