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Last Friday, the U.S. September Nonfarm Payrolls came in at 254,000, showing a significant increase from the previous month, while the unemployment rate decreased to 4.1%. This has brought attention to the fact that the Fed's “big cut” expectations are being dismissed, and even the possibility of a rate hold is emerging.
Geopolitical risks in the Middle East are also drawing buyers to the dollar, as fears continue that Israel could strike Iran’s oil facilities. Meanwhile, after meeting with Bank of Japan Governor Kazuo Ueda, newly elected LDP leader Shigeru Ishiba stated that it is not yet the right time to raise rates, indicating that the environment is not conducive to a rate hike. Ishiba’s dovish stance, which contrasts with expectations of a more hawkish approach, has surprised the market.
October 10: Federal Open Market Committee (FOMC) minutes, U.S. September Consumer Price Index (CPI)
October 11: U.S. September Producer Price Index (PPI)
As expectations for rate cuts in both the U.S. and Japan shift, USD/JPY volatility has increased. The most notable development is the break above the 144–145 resistance zone, which opens up the possibility of testing the 149–152 resistance zone. With the pair now reaching that resistance level, two possible scenarios can be expected:
First, a continued rise to the 152 line, followed by resistance and a retreat to the 145 line. Second, resistance at the 149 line, leading to a fall to the 140 line and the formation of a consolidation range.
If any unexpected moves occur, I’ll promptly adjust the strategy accordingly.
