The sharp miss underscores fragile consumer demand and may temper expectations for sustained BOJ tightening. While a December hike remains the base case, markets may pare back longer-term rate forecasts, supporting JGBs and weighing slightly on yen optimism.
The RBI’s tolerance for a weaker rupee signals reduced intervention risk and greater FX flexibility, but rising outflows and oil-driven import costs keep depreciation pressures alive. Equity inflows may stay cautious until external balances stabilise or clarity emerges on India-US trade and index-inclusion prospects. Softer US yields could provide limited relief.
The comments reinforce a steady policy backdrop ahead of a potential BOJ rate shift. Affirming BOJ autonomy reduces fears of political pressure, while the focus on fiscal sustainability helps anchor JGB markets, though vigilance toward yields and yen volatility remains key.
A unanimous hold signal reinforces stability in short-end pricing, but the shift toward a long pause — and rising chatter about possible hikes — may lend support to AUD and keep front-end yields firm. Markets will watch the December statement closely for any tightening bias as inflation pressures remain elevated.
Renewed wage pressure strengthens the narrative that Japan’s labour market is providing the “initial momentum” Governor Ueda says is necessary for sustainable inflation. Robust union demands into shuntō raise the probability of a December BOJ rate hike, supporting yen upside at the margin while keeping upward pressure on JGB yields. Markets will track how widely these wage requests are adopted across sectors.
Government backing removes a key hurdle for the BOJ’s December hike and reduces near-term policy risk. But without clarity on the eventual neutral rate, long-end JGBs remain vulnerable and yen volatility stays elevated. Forward guidance at the December meeting will be crucial for FX and rates positioning.
Euro retreats somewhat on Thursday as traders digest the last round of US jobs data as they also brace for the release of the Federal Reserve’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index. At the time of writing, the EUR/USD trades at 1.1649, down 0.19%.
Gold (XAU/USD) registers modest gains on Thursday, even though the latest US jobs data indicates that the labor market remains resilient, though signs of cooling are emerging.
The EURUSD has the low of a swing area at 1.1645. The 100 day MA is also in play at that level. Key level today and going forward for the buyers and sellers.
The AUDUSD has move up to test a key swing area between 0.66347 and 0.6635. Do the sellers stick a toe in the water against this key ceiling area? I talk about it in the video
The Pound Sterling (GBP) rises against the US Dollar (USD) during the North American session on Thursday, even though US jobs data suggests that the labor market remains solid, and the expectations that the Federal Reserve (Fed) will cut rates remain high.
Silver (XAG/USD) trades on the back foot on Thursday as bulls take a breather and book partial profits after the metal climbed to record highs near $58.98 on Wednesday. At the time of writing, XAG/USD is trading around $56.87, down roughly 2.77% on the day.
The Pound Sterling (GBP) stays firm near the top of its overnight range, with options markets sharply repricing protection against GBP weakness after the UK budget.
The Euro (EUR) is consolidating this week’s advance, supported by widening rate differentials and a neutral ECB outlook, with little reaction to soft euro-area data.
Gold (XAU/USD) holds steady on Thursday, moving quietly within the $4,160-$4,260 range as investors adopt a wait-and-see approach ahead of the Federal Reserve’s (Fed) monetary policy meeting next week.
Gold (XAU/USD) is posting minor losses for the third consecutive day on Thursday, weighed by lower demand for safe havens amid a moderate risk appetite. The precious metal, however, remains supported above the mid-range of the $4,100s with the $4,264 high at a short distance.
USD/CNH bounced from a one-year-plus low as the PBOC set a higher-than-expected fixing, signaling managed support for yuan appreciation. A stronger Yuan could help China pivot towards consumer-led growth, while the USD/CNH downtrend remains intact, BBH FX analysts report.
USD/JPY dipped below 155.00 as strong demand for Japan’s 30-year government bonds pushed yields lower, highlighting investor appetite ahead of the Bank of Japan’s (BoJ) December rate decision, BBH FX analysts report.
The Euro is picking up from five-week lows near 0.8735 on Thursday, as the Pound loses steam, following Wednesday’s rally. The pair, however, maintains its bearish trend intact, with technical indicators pointing lower and investors upbeat about the details of the UK budget.
USD/BRL remains range-bound after hitting an interim low near 5.27, with momentum indicators showing potential for a pause in the downtrend, Société Générale's FX analysts note.
EUR/USD has broken above the upper boundary of a descending channel, extending its upward momentum while holding support at 1.1550, Société Générale's FX analysts note.
The US Dollar (USD) fell below 99, benefiting the pound, NOK, AUD, and NZD, amid signs of weak labor demand and easing service-sector inflation pressures.
The Pound Sterling (GBP) shrugged off Autumn Budget worries, supported by orderly gilt markets and cautious OBR growth forecasts. Softening US Dollar (USD) and Fed-cut expectations continue to drive GBP gains, DBS' Senior FX Strategist Philip Wee notes.
EUR/USD keeps trading back and forth on Wednesday, and holds marginal gains on the daily chart at 1.1670, after hitting the highest levels in more than six weeks, at 1.1682.
USD/JPY remained largely unchanged as markets await further guidance from the BoJ, with a December hike already largely priced in. Pair was last seen at 155.06 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
The US Dollar (USD) fell as risk sentiment stabilized and soft ADP data reinforced expectations of a Fed rate cut next week. Despite potential short-term stabilization, the dollar faces continued downside pressure from overvaluation and seasonal trends, ING's FX analyst Francesco Pesole notes.
The Australian Dollar (AUD) continued climbing against the US Dollar (USD), supported by firm technicals and favourable external drivers as the currency approaches key resistance levels. AUD/USD was last at 0.6615 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
The US Dollar (USD) drifted lower after weak ADP and ISM services prints, while broader risk sentiment stayed supported. DXY was last seen at 98.90 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
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