Fundamental Market Analysis for October 07, 2026 USDJPY
Event to watch today:
17:30 EET. USD - Crude oil inventory data from the Department of Energy
21:00 EET. USD - Release of the FOMC meeting minutes
USDJPY:
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The US-Japan yield spread continues to support USDJPY despite new arguments in favor of the yen. For investors, not only the next step by central banks matters, but also the return on deploying funds starting today. High yields on US bonds keep dollar assets attractive, while Japanese policy implies gradual changes.
Real wages in Japan rose by 1.5% year-on-year in August, and nominal wages by 3.8%, slightly exceeding expectations. This improves purchasing power and strengthens the case for further rate hikes by the Bank of Japan. However, the growth of real wages has slowed, and statements about gradual tightening do not confirm a sharp reduction in the interest rate differential in the near term.
Weaker US inflation and employment data limit the dollar's potential; signals from the FOMC minutes are important today. A decline in US yields or new official warnings from Japan could change the scenario. As long as the advantage of dollar assets outweighs support for the yen, the idea of USDJPY rising remains without expecting accelerated movement.
Trading idea: BUY 158.40, SL 158.05, TP 159.15