Economic Indicators - Japanese corporate spending on factories and equipment rose by 2.9% in July-September compared to the same period last year, indicating resilience in the economy despite U.S. tariffs [1][12] - The yen gained 0.2% to 155.84 per dollar, moving away from its 10-month low of 157.90, which raised concerns about potential yen-buying interventions from Tokyo [2][12] Currency Market Dynamics - Finance Minister Satsuki Katayama noted that recent fluctuations in the foreign exchange market and the rapid weakening of the yen are not fundamentally driven [4][12] - The dollar has experienced a broad pullback, providing some relief to the yen, although it remains only 0.9% stronger for the year and is near lows against the euro and sterling [6][12] Federal Reserve Outlook - Markets are pricing in an 87% chance of a 25 basis point rate cut by the Federal Reserve in the upcoming meeting, influenced by recent shifts in Fed easing expectations [7][12] - The dollar faced its worst week in four months, impacted by the potential nomination of Kevin Hassett as the next Fed chair and expectations of a dovish policy shift [8][12] Other Currency Movements - The euro slightly increased by 0.02% to $1.1600 against a weaker dollar, while the British pound remained stable at $1.3240 after a positive budget announcement [6][7][12] - The Australian dollar decreased by 0.08% to $0.6543, and the New Zealand dollar fell by 0.09% to $0.5733, reflecting broader market trends [9][12] Cryptocurrency Performance - Bitcoin dropped by 3.6% to $87,881.82, while ether fell by 5% to $2,871.59, indicating volatility in the cryptocurrency market [10][12]

Currency intervention is among the possible responses if there are excessive moves in the foreign exchange market, Japan’s Finance Minister said, as the yen continues to hover near its weakest levels since January https://t.co/9aEedcrwKj ...

New Asset Listing - JPYC, a tokenized version of the Japanese yen, has been listed [1] - JPYC is available on Ethereum, Avalanche (AVAX), and Polygon [1] Market Position - The Japanese yen is the third-most traded currency in the foreign exchange market [1]

Currency Market Overview - The dollar eased after the U.S. government shutdown ended, while the yen hit a record low against the euro due to Japan's new prime minister advocating for slow rate hikes [1][5] - The Australian dollar reached a two-week high following a significant drop in the unemployment rate, reducing the likelihood of further rate cuts [2] Economic Data Impact - Currency markets may experience volatility as a backlog of economic data is released after the government shutdown, although some key figures for October may not be published [3] - The resolution of the Congressional impasse has removed uncertainty and a major growth headwind for markets [4] Yen and Interest Rate Dynamics - The yen traded at 179.805 per euro before recovering slightly, and approached a low of 155.02 per dollar, indicating significant weakness [5] - Japanese officials expressed concerns over yen weakness, with Finance Minister warning about rapid movements in the foreign exchange market [6] - A weak yen could compel the Bank of Japan to consider rate hikes, with traders estimating a 22% chance of a quarter-point increase in December and 43% by January [6] - Economists suggest that the government's survival may depend on managing the exchange rate, indicating a potential acceptance of rate hikes by the Bank of Japan to mitigate yen weakness [7]

Core Viewpoint - The US dollar is expected to be more sensitive to poor economic data releases than to positive ones, indicating a need to reassess its outlook in the near future [1]. Economic Data Focus - Key economic indicators to watch include labor data and Consumer Price Index (CPI) data, which may be influenced by recent shutdowns [2]. Market Positioning - Recent ADP data release led to a significant sell-off of the dollar, suggesting that market positioning has shifted, with less short interest in the dollar compared to earlier in the year [3]. - Despite being the worst-performing G10 currency year-to-date, the dollar has shown resilience in the second half of the year [3]. Currency Performance - The Norwegian krona was the best performer following the recent data release, while the dollar had been the top G10 currency performer in the previous week [4]. Outlook for the Dollar - There is a need to reassess the dollar's outlook against other currencies, particularly the euro and Japanese yen, as the latter shows signs of potential intervention from Japanese authorities [5][6]. Japanese Yen Dynamics - The new finance minister of Japan appears increasingly uncomfortable with the yen's performance, hinting at possible interest rate hikes or intervention from the Bank of Japan [6][7]. - The market is cautious about the yen's movements, particularly around the 0.55 level, indicating a significant focus on the yen's story in the current economic landscape [7].