Fundamental Market Analysis for October 28, 2026 USDJPY
Event to watch today:
21:00 EET. USD - FOMC Interest Rate Decision
USDJPY:
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The yield on US ten-year bonds remains around 5%, maintaining the dollar's interest rate support against the yen ahead of the Fed's decision. In the absence of a signal for imminent policy easing, US assets may retain their appeal. However, the mere maintenance of the rate is already expected by the market and does not guarantee further USDJPY growth: December guidance will be decisive.
The Bank of Japan will announce its decision on Friday; current expectations suggest a pause. Without a fresh signal to accelerate tightening, it is difficult for the yen to quickly close the interest rate gap. At the same time, rising inflation risks could prompt the Japanese regulator to adopt stricter stances, so the expectation of the meeting limits confidence in continued yen weakening.
Yesterday, the Japanese Finance Minister again stated readiness for decisive action in the foreign exchange market. This poses a specific risk to the bullish idea, although the warning does not yet mean an intervention has been carried out. As long as US yields remain stable, their support for the dollar only moderately outweighs this risk. The base scenario allows for an increase in USDJPY; a decline in yields after the Fed could cancel it out.
Trading idea: BUY 157.95, SL 157.60, TP 158.65