USD/JPY gains as US yields rise, ahead of Fed’s decision

Source Fxstreet
  • USD/JPY up 0.20%, driven by higher US Treasury yields and strong US economic indicators.
  • US JOLTs data indicates more job openings, reflecting a solid labor market; Consumer Confidence slightly underperforms.
  • Anticipation of Fed's decision grows, with rate and balance sheet policies in spotlight, amidst Japan's easing labor market data.

The USD/JPY remains positive in the day, trimming some of its Monday’s losses, sponsored by an uptick in US Treasury yields, which underpinned the Greenback (USD). Data from the United States (US) was solid, though it isn’t expected to move the needle amongst US Federal Reserve’s officials on tomorrow’s decision. At the time of writing, the major exchanges hands at 147.80, up 0.20%.

Strong US JOLTS report and Consumer Confidence, boosts US Dollar

The US Department of Labor revealed the latest Job Opening and Labor Turnover Survey (JOLTs), which showed that job openings are rising, underscoring a strong labor market that powers economic growth. Openings rose 9.02 million, exceeding forecasts of 8.75 million and November’s 8.925 million. The data highlighted the largest increase came in education and health services.

At the same time, the Conference Board (CB) revealed its latest Consumer Confidence pollo, which came at 114.8 in January, from 108 in December, slightly below the consensus of 115.0. Dana Peterson, Chief Economist at the Conference Board, said, “January's increase in consumer confidence likely reflected slower inflation, anticipation of lower interest rates ahead, and generally favorable employment conditions as companies continue to hoard labor.”

Given the data released, the scenario for the US economy for a soft landing has increased, as the economy remains resilient while inflation continues to trend down.

That said, traders’ attention turns to Wednesday's Fed’s monetary policy decision. Most analysts estimate the US central bank would keep rates at 5.25%-5.50% and will eye if policymakers discuss halting the balance sheet reduction. Besides that, market players will be eyeing Chair Jerome Powell's press conference.

In Japan, the unemployment rate fell to 2.4% in December from 2.5%, showing the labor market is cooling, which could prevent the Bank of Japan (BoJ) from ending its negative interest rate cycle. That following last week, Japan’s inflation report dropped below the 2% goal set by the BoJ, and rose by 1.6% YoY, down from 1.9%.

USD/JPY Price Analysis: Technical outlook

the USD/JPY is trading sideways, as the daily chart depicts. Buyers are at the brisk of losing control if the major slips below the Tenkan-Sen level at 147.73. Further downside is seen at the 147.00 figure, ahead of the January 24 cycle low of 146.65. If the pair reclaims 148.00, that could pave the way to challenge the January 19 high at 148.80, ahead of 149.00.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Today’s Market Recap: U.S. Stocks Rebound as Nasdaq Gains 1.11%, Memory Chip Stocks Rally, SanDisk Jumps 5.5%U.S. stocks rebounded on Monday, October 19, following a sharp sell-off in AI infrastructure stocks last week, lifting the Nasdaq Composite and S&P 500.At the clo
Author  TradingKey
Yesterday 01: 25
U.S. stocks rebounded on Monday, October 19, following a sharp sell-off in AI infrastructure stocks last week, lifting the Nasdaq Composite and S&P 500.At the clo
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - October 20, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 20, 2026. Read on for the details.
Author  Mitrade
Yesterday 03: 17
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 20, 2026. Read on for the details.
placeholder
Dollar presses 102 as the 10-year yield sits at 5.14% — and October hike odds are only 17%The dollar index closed at 101.99 (+0.20%) on Monday after briefly topping 102.07, while the 10-year Treasury yield rose to 5.14% and the 2-year hit 4.774% — yet futures price only about a 17% chance of a hike at the October 27-28 FOMC, versus roughly 90% for December. The driver is a global bond selloff, not a Fed repricing: France's 10-year OAT jumped to 4.84% ~ 4.94% and the OAT-Bund spread widened to 140 ~ 146bp. Here are the levels, the cross-asset read-through and what to watch.
Author  Irene Q.
Yesterday 05: 50
The dollar index closed at 101.99 (+0.20%) on Monday after briefly topping 102.07, while the 10-year Treasury yield rose to 5.14% and the 2-year hit 4.774% — yet futures price only about a 17% chance of a hike at the October 27-28 FOMC, versus roughly 90% for December. The driver is a global bond selloff, not a Fed repricing: France's 10-year OAT jumped to 4.84% ~ 4.94% and the OAT-Bund spread widened to 140 ~ 146bp. Here are the levels, the cross-asset read-through and what to watch.
placeholder
Tesla Q3 Earnings Preview: Can Auto Margins Stabilize? Wall Street’s Highest Price Target at $550Tesla (TSLA) will report its third-quarter 2026 financial results after the U.S. stock market close on October 21, Eastern Time, and host an earnings conference call at 17:30 that day. Th
Author  TradingKey
Yesterday 10: 22
Tesla (TSLA) will report its third-quarter 2026 financial results after the U.S. stock market close on October 21, Eastern Time, and host an earnings conference call at 17:30 that day. Th
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - October 21, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 21, 2026. Read on for the details.
Author  Mitrade
11 hours ago
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 21, 2026. Read on for the details.
Related Instrument
goTop
quote