This Week: Will USDJPY stay above or below 150?

Last week, the Japanese Yen was the least-volatile currency amongst G10 currencies against the US dollar.

But all that could change this week, with USDJPY volatility forecasted to be at its highest in over a month, despite rumoured Bank of Japan intervention to stem excessive Yen moves.

Bloomberg’s FX model predicts a 79% chance that USDJPY will trade within the 146.86 – 152.07 range this week.

There are major volatility triggers lined up, including crucial policy signals potentially emanating out of either side of the Pacific, along with the highly-anticipated monthly US jobs report.

Events Watchlist

• Tuesday, October 31st: Bank of Japan policy decision

To be clear, the BoJ is not expected to make any changes to its policy tools this week.

A shock BoJ move amid the turmoil in US bond markets would only heap more fuel on the fire.

Still, JPY bulls are ready to pounce on the slightest hint of incoming policy tightening by BoJ Governor Ueda, which could drag USDJPY lower.

• Wednesday, November 1st: Fed rate decision; US Treasury quarterly refunding announcement

Markets also fully expect the FOMC to keep its benchmark rates unchanged, with Fed Chair Jerome Powell likely to reiterate the “higher for longer” mantra.

However, greater volatility could emerge as the US Treasury reveals how much debt it needs to sell in the near future.

Soaring US yields should send USDJPY further past 150, although any erratic price moves upwards for this FX pair might invite significant BoJ intervention.

• Friday, November 3rd: US October nonfarm payrolls (NFP)

Economists predict that the US jobs market added 190,000 new jobs in October – its lowest tally since June.

Yet, seasoned market watchers know that the NFP print has often surprised to the upside this year.

If cracks start to appear in the US jobs market, that could keep USDJPY below its 21-day SMA for support.

Here’s comprehensive list of other key economic data and events due this week:

Monday, October 30

• AUD: Australia September retail sales
• EUR: Germany October CPI, 3Q GDP; Eurozone October consumer confidence

Tuesday, October 31

• JPY: Bank of Japan rate decision; September unemployment, retail sales, industrial production
• CNH: China October PMIs
• EUR: Eurozone October CPI; 3Q GDP
• USD: US October consumer confidence

Wednesday, November 1

• NZD: New Zealand 3Q unemployment
• CNH: China October manufacturing PMI
• USD: FOMC rate decision; US Treasury quarterly refunding announcement

Thursday, November 2

• AUD: Australia September external trade
• NOK: Central Bank of Norway rate decision
• GBP: Bank of England rate decision
• USD: US weekly initial jobless claims
• SPX500_m: Apple earnings

Friday, November 3

• CNH: China October composite PMI
• EUR: Eurozone September unemployment
• CAD: Canada October unemployment
• USD: US October nonfarm payrolls, ISM services index