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Japanese Yen struggles amid elevated Oil prices and wide rate differentials
- USD/JPY gains as the Japanese Yen underperforms and firm US jobs data support the US Dollar.
- Elevated energy costs and Japan’s interest rate disadvantage keep pressure on the Yen.
- Traders monitor US midterm elections, US-Iran headlines and upcoming employment data.
USD/JPY edges higher on Tuesday as the Japanese Yen (JPY) underperforms its major peers, while stronger-than-expected US economic data lift the US Dollar (USD). Traders also monitor the US midterm elections and US-Iran headlines, which keep Oil prices volatile. At the time of writing, the pair trades around 158.50, up 0.37% on the day.
US JOLTS Job Openings rose to 7.523 million in September from 7.19 million, exceeding expectations of 7.13 million. The US Dollar Index (DXY), which tracks the currency against six major peers, trades around 101.90, recovering from an intraday low of 101.63.
Oil prices swing in both directions on Tuesday as traders react to changing headlines. Crude initially rose after the Wall Street Journal (WSJ) reported a US strike on Iran’s Qeshm Island. Prices later fell following unconfirmed reports that Washington and Tehran have made concessions over Iran’s nuclear programme and frozen funds, before recovering some ground.
Oil remains elevated as US-Iran negotiations lack a clear path forward, even as diplomatic efforts continue. Energy-driven inflation risks reinforce expectations of additional interest rate hikes by the Federal Reserve (Fed). The Fed raised interest rates by 25 basis points (bps) in September before pausing in October, while reaffirming its commitment to restoring price stability. Traders price in a 75% chance of another increase in December, according to the CME FedWatch Tool.
The Japanese Yen remains under pressure despite expectations of further Bank of Japan (BoJ) tightening. The energy shock is also keeping other major central banks hawkish, leaving Japan’s interest rates relatively low compared with its peers and putting the Yen at a yield disadvantage.
Japan’s heavy reliance on imported energy, particularly crude from the Middle East, adds to its vulnerability. Elevated Oil prices raise the country’s import bill and could weigh on economic growth.
Looking ahead, Japan’s economic calendar remains light for the rest of the week, leaving US employment data in focus. Upcoming releases include ADP Employment Change on Wednesday, followed by Initial Jobless Claims on Thursday and Nonfarm Payrolls (NFP) on Friday.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | -0.02% | 0.33% | 0.00% | 0.27% | 0.02% | 0.36% | |
| EUR | -0.01% | -0.03% | 0.34% | -0.01% | 0.26% | 0.00% | 0.34% | |
| GBP | 0.02% | 0.03% | 0.34% | 0.02% | 0.30% | 0.03% | 0.38% | |
| JPY | -0.33% | -0.34% | -0.34% | -0.33% | -0.06% | -0.31% | 0.03% | |
| CAD | -0.01% | 0.01% | -0.02% | 0.33% | 0.28% | 0.02% | 0.35% | |
| AUD | -0.27% | -0.26% | -0.30% | 0.06% | -0.28% | -0.25% | 0.08% | |
| NZD | -0.02% | -0.00% | -0.03% | 0.31% | -0.02% | 0.25% | 0.34% | |
| CHF | -0.36% | -0.34% | -0.38% | -0.03% | -0.35% | -0.08% | -0.34% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
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