• Yen hits key 160 level for third session, dollar buoyed by Gulf woes

• An internal model shows USD/JPY should be trading well above 160

• USD/JPY has seen a tight 159.90-160.01 range, on Friday, according to EBS data

• Japan warns of 'decisive action' to defend yen as FX reserves tumble

• There is scope for gains to retest the 2026 160.72 peak

• A break above 160.72 peak would put the Japanese authorities under pressure to act

• 30-day log correlation between USD/JPY, EUR/JPY is above +0.5 (pairs moving in tandem)

Daily Chart


Correlation Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Cable has traded on a 1.34 handle over the past week; 1.3407-1.3485

• 1.34185-1.3431 is Friday range-to-date. U.S. jobs report due at 1230 GMT

• May non-farm payrolls forecast at 85k; jobless rate forecast at 4.3%

• Labour's Burnham signals he would run in leadership contest against Starmer

• BBC says Survation poll showed Burnham on 49% support in Makerfield vs 39% Reform

• MPC's Dhingra (dove) to speak at 1340 GMT; BoE's Bailey speaks at 1800 GMT

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• USD/JPY 160.00 breakout hype has been unwound — spot failed to sustain gains above the figure and intervention also absent

• 1-month expiry implied volatility jumped from 4-yr lows of 6.3 to 7.25 as 160.00 tested, but now 6.5 as realised vol stays absent

• With spot pinned at 160.00 and realised vol disappointing, time decay costs now outweigh breakout risk for vanilla option holders

• Sub-1-week 10-delta butterfly spreads remain sticky near multi-year highs — tail risk hasn't yet deflated despite the vol surface easing

• NFP vol premium also paring back — overnight USD/JPY straddle breakeven now 53 pips, down sharply from 73 pips on Thursday

• Options market verdict: 160.00 is a ceiling, not a launchpad — risk premium unwind signals fading conviction in any near-term breakout

• However, NFP remains the wildcard — a major miss or beat could quickly reopen the breakout debate
USD/JPY FX option implied volatility


USD/JPY 10 delta butterfly spreads


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• GBP/USD consolidates in Asia after closing unchanged on Thursday

• Traders take to sidelines as conflicting reports on Iran peace talks tire

• Hezbollah rejection clouds Lebanon ceasefire, prospects for ending Iran war

• U.S. jobs report Fri key; NFP expected +85k, unemployment rate steady @ 4.3%

• Data more likely to lift USD than weaken it

• Labour's Burnham signals he would run in leadership contest against Starmer

• BoE Governor Andrew Bailey, MPC's Swati Dhingra speak Friday

• 1.3350-1.3500 range trading to continue; support 1.3400-05, 1.3370-75

• Resistance 1.3460-70, 1.3500; Thu range 1.34115-1.34615, Asia 1.34185-1.3430
UK seeing a sharp increase in inflows:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.2% Fri as markets begin to revisit Middle East realities

• Hezbollah's rejection of 'renewed' U.S. negotiated ceasefire speaks volumes

• Trump says Middle East ceasefires mean "shooting in a more moderate manner"

• U.S. May non-farm payrolls due Fri, Reuters poll consensus +85k

• AUD probing 0.7110 55-DMA, targets 0.7080 support, break below quite bearish

• Pair pushing hourly lower Bollinger band, may slow progress but bias lower

• Range Asia 0.7105-36, support 0.7080 0.6834, resistance 0.7200 0.7283
AUD Daily 55-DMA


AUD Hourly Bollinger Study

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Shares of Australia's Resolute Mining fall as much as 14.2% to A$1.025, logging their worst trading session since November 18, 2024

• Stock hits its lowest level since November 24, 2025

• The gold miner says production at its Syama gold mine in Mali impacted by security-related logistical disruptions

• Says it expects 2026 Syama gold production at the lower end of its forecast

• Stock down 14% this year, including the day's move

(Reporting by Rajasik Mukherjee in Bengaluru)

• USD/JPY market jittery, on nervous hold ahead of US jobs report tonight

• Japan FX intervention watch on after recent govt jaw-boning

• PM Takaichi looks to have signed off on action if seen necessary

• BOJ June hike on deck too, question whether July hike telegraphed too

• USD/JPY 159.98-160.01 EBS so far today, 160.09 highs past two days

• Japanese exporters likely on offer 160.00+ but Gotobi Tokyo fix today

• Japanese importers seen busy too, demand too on dips from specs, investors

• In options, $2.3 bln 159.90-160.00 strike expiries today, gravitational pull

• Below total $3.3 bln between 159.00-50, above $1.3 bln between 160.10-65

• JGB-US Tsy rate differentials in stasis for now, in 2s @265, 10s @181 bps

• Nothing definitive on US-Iran, crude oil prices off a tad

• Related comments , , ,

• Also , on US economy ,

• US markets , , ,

• Fed-speak , ,
USD/JPY:


USD/JPY nearby option expiries into next week:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD flat early Fri as traders search for next directional cue

• RBA's Bullock: signs rate hikes are working, inflation still a concern

• U.S. initial jobless claims 225k (poll 213k), hits 4-month high

• Hezbollah rejects renewed Israel ceasefire announced by U.S. Thur

• Trump says Middle East ceasefires mean "shooting in a more moderate manner"

• AUD needs fresh catalyst to exit 0.7080-0.7200 channel, slight downside bias

• Overnight range 0.7127-49, support 0.7080 0.6834, resistance 0.7200 0.7283
US Initial Jobless Claims & Planned Layoffs


AUD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Goldman Sachs Research maintains a bullish on CHF over the medium-term.

"The shift in the SNB's intervention bias has been key in capping any haven-based gains for the Franc so far, but we think a reacceleration in domestic Swiss inflation should be enough to shift that bias back to a neutral setting and uncover those haven benefits. This is the main angle through which we will be watching the SNB's upcoming meeting on June 18," GS notes.

"This path to looser SNB FX management is central to our expectation for further CHF outperformance in the months ahead, but several important risks remain. First and foremost, EUR/CHF carry-to-vol is close to post-2015 highs, weakening risk-reward in outright downside positions. Second, we find evidence that gold's shifting correlation to risk is spilling over to the Franc and is likely to continue to be a source of idiosyncratic vol for the Franc via its terms of trade linkages," GS adds.

• GBP$ eking out slight gain in NY afternoon, +0.1% at 1.3430; NorAm range 1.3462-1.3427

• Early NorAm rise on back of Israel-Hezbollah ceasefire, broader Mideast peace ebbs

• Bulls reluctant to take out multiple DMA resistance by 21-, 100- and 30-DMAs 1.3464-88

• Market focus shifting to U.S. payroll data Friday, for clues at Fed policy in H2 2026

• Today's IJC was a smidge higher, continuing claims lower; may be at odds w/falling NFP f/c

• Mideast peace headline yaw should revert to primary focus post-NFP

• GBP$ remains anchored near the middle of its recent 1.33-1.35 range awaiting peace

• Supt at 1.3412 the June 3/4 lows, 1.3386 the daily cloud base, 1.3342 the lower 30-d Bolli

GBP$ Chart:


(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

• NY opened near 1.1625 after EUR/UDS rallied sharply in Europe's morning

• Rally extended early NY on USD, US yield , UDS/CNH, oil drops

• Additional weight added to USD due to gains in gold, silver and equities

• EUR/USD rallied above the 10-DMA, hit 1.1646 then started sliding down

• USD firmed up in NY's afternoon, EUR/USD neared 1.1620 late, was up only +0.20%

• Head & shoulders on monthly chart, pair's hold below 10-, 21-, 55- & 200-DMAs worry bulls

• US May employment report is a key risk for Friday
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.7130 after 0.7123 traded overnight, pair rallied in early NY

• Drops in USD, US yields , USD/CNH & oil helped boost the pair

• Gold, silver, copper & equity gains also helped the lift; AUD/USD hit 0.7149

• A bit of USD firmness saw the pair near 0.7140 late, pair was up +0.18% in NY's afternoon

• Head& shoulders on daily chart, falling monthly RSI are concerning signs for AUD/USD bulls

• US May payroll report Friday could determine if the bears signals get validated
audusad


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Morgan Stanley Research previews the US May jobs report on Friday.

"We forecast payrolls rose 65k and private payrolls rose 75k. The federal government layoffs remain a drag on headline payrolls, and we also incorporate drags on private payrolls from the transportation sector," MS notes.

"For the household survey, we expect another 4.3% unemployment rate (still on the cusp of 4.2%) and an unchanged labor force participation rate. Average hourly earnings likely rise 0.3% m/m, and the 12-month pace slows 0.1 pp to 3.5% y/y," MS adds.

USD/JPY is maintaining a firmly bullish tone, reclaiming the key 160 psychological level despite pressure from softer oil, lower U.S. yields, and ongoing intervention concerns. Intraday action shows persistent dip-buying ahead of the Tenkan-sen near 159.42, with Friday's US jobs report looming and as large options expire. While daily indicators such as stochastics hint at a possible pullback and some yen short-covering, near-record futures open interest underscores continued buildup of short yen positions.

Further gains would target 160.47, the March high, followed by the April 30 peak at 160.72.

Ministry of Finance data suggests rising JGB yields are beginning to attract investor flows, which could intensify if the Bank of Japan delivers a widely expected 25 basis point rate hike to 1% and signals adjustments to bond tapering.

While JGB buying may buoy the yen, USD/JPY would need to fall below its 158.78 21-DMA, the cloud top at 158.11 and May 6 high at 157.93 to attract bears.
Yen


(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

ANZ Research discusses NZD outlook and target NZD/USD and AUD/NZD at 0.64, and 1.17 respectively by year-end.

"The NZD was the strongest performer in the G10 through May, with NZD/USD rising 1.3%. The move was driven by a more clearly hawkish RBNZ and a drop in oil prices. Clear de-escalation and reopening of the Strait of Hormuz would support gains via improved risk sentiment and lower oil prices. In that scenario, the NZD should continue to outperform, particularly as rate differentials would regain further control of moves, which, given how hawkishly the RBNZ has repriced, should be supportive," ANZ notes.

"AUD/NZD reversed sharply lower after reaching a year-to-date high of 1.2288 (27 May), ending the month closer to 1.20. This reflected soft Australian data and the RBNZ’s hawkish hold. We think the cross has peaked. With the RBA probably at the end of its cycle and the RBNZ set to begin hiking, widening rate differentials should drive AUD/NZD lower, in line with our year-end forecast of 1.17. Positioning dynamics also favour downside, with AUD still heavily net long, leaving the cross vulnerable to a pullback," ANZ adds.

Sterling is poised to remain range-bound in the near term, with GBP/USD likely oscillating within its established 1.33–1.35 band as markets await clearer signals from geopolitical developments and key inflation data.

The pound moved higher Thursday, pushing toward recent trend highs near 1.35, buoyed by a more optimistic geopolitical backdrop in the Middle East. However, the situation remains volatile. Iran has repeatedly signaled its unwillingness to negotiate its nuclear capabilities — a position at odds with President Donald Trump's insistence that any forthcoming peace deal must include such concessions — creating a meaningful ceiling for risk-on momentum. On the UK domestic front, fiscal concerns persist, with elevated gilt yields reflecting ongoing investor caution. Prime Minister Keir Starmer has managed to quiet some of the political noise recently, but the June 18 Makerfield by-election carries fresh significance following the resignation of Labour MP Josh Simons, which potentially clears the path for Andy Burnham to mount a leadership bid. On the monetary policy front, the Bank of England appears set on a steady near-term course, with futures markets pricing in two 25bp rate hikes in Q4 2026. The Federal Reserve is similarly expected to hold steady in the near term, though STIR futures indicate roughly 60% odds of a 25 basis point hike in December. A recent hawkish shift in Fed expectations, given persistent U.S. inflation, has lent support to the U.S. dollar. Friday's U.S. nonfarm payroll release will be closely watched for clues on Fed policy direction and, by extension, the near-term GBP/USD outlook.

Technically, cable is likely to continue trading within its 1.33–1.35 consolidation range until a more decisive geopolitical development or UK/U.S. inflation-related catalyst emerges.
Sterling Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Credit Agricole CIB Research discusses the scope for another round of JPY intervention by Japan's MoF.

"BoJ Governor Kazuo Ueda was on the hawkish side yesterday indicating that a June rate hike is likely but not guaranteed. But with Japan's rates market already over 80% price for a June hike, the JPY's upside from Ueda's hawkishness as well as a June rate hike is limited. We maintain this would only change if the BoJ were to perform a hawkish hike indicating investors would not have to wait another six months for another rate hike...So it appears that even the BoJ is joining the fight to defend the JPY. The main support for the JPY, however, remains the threat of and/or actual intervention," CACIB notes.

"To maintain credibility, the MoF would have to trigger another round of intervention if USD/JPY were to significantly breach 160, even though it would likely be fighting fundamentals. Oil prices remain elevated as does the US-Japan short-term rates spread," CACIB adds.

Bank of America Global Research highlights the key themes for its latest G10 FX flows and positioning report.

"USD buying vs JPY and EUR has been the key theme in G10 FX flows since the start of the Middle East conflict (Exhibit 1). Notably, options and futures flows have continued to support the USD even post-ceasefire, likely reflecting strong US data," BofA notes.

"Our positioning signals point to risks around AUD longs and NZD, JPY, and GBP shorts. EUR positioning appears light and, within G4 FX, we tactically favour USD longs against it," BofA adds.

• AUD/USD traded up slightly, pair traded 0.7123-0.7138, was up +0.10% early NY

• Drops in USD, US yields , oil , UDS/CNH helped prop up the pair

• Gains in gold , silver & copper also helped the pair trade up

• AUD/USD remains in its recent 0.7080-0.7200 range ahead of US May jobs data Friday

• Pair hemmed in by the 10- & 21-DMAs on top & the 55-DMA, daily cloud top down below

• June's price drop following May's doji could be a concern for AUD/USD bulls

• US weekly and continuing jobless claims are data risks in NY's morning
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

June 4 (Reuters) - FX traders should beware that GBP/USD's momentum reading recently turned positive, in a month where spot usually climbs, increasing the likelihood of the market closing in positive territory in June this year.

GBP/USD performance for each June since 2000 shows it has risen in 16 of the last 26 years, or 62% of the time. Seasonality should not be considered in isolation, but it's a useful tool combined with other factors. The pound was little changed on Thursday as markets remained focused on the uncertain outcome of U.S.-Iran peace talks.

Cable's 14-day momentum reading turned positive on Wednesday, highlighting a shift in technical bias to upside despite Wednesday's drop.

There is scope for GBP/USD to rise to test the May 25 1.3509 peak, a break above which would unmask the 1.3658 May 1 high and then the 1.3700 Fibo, a 76.4% retrace of the 1.6867 to 1.3160 (January-March) drop.
Momentum Chart


Daily Chart


Seasonality Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• EUR/USD pressured by recent broad based USD gains and souring risk sentiment but still well contained

• Tight 1.1595-1.1615 range so far Thursday, Matches Wed's low. Support May 28/22 lows 1.1587-77

• Daily cloud 1.1629-83 now adding resistance, with 21-55 dma's around 1.1660 and key 200-dma 1.1682

• FX option implied volatility sits just above recent and 2026 lows - little perceived realised FX volatility risk embedded

• Risk reversals have increased EUR put over call vol premium to 0.375 - recognising raised downside risk to spot

• Huge FXO expiries continue to dominate - effect amplified with markets mostly sidelined into Friday's NFP data

• Related comment - Are FX markets underpricing June Fed risk?
EUR=EBS


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Yen trades circa the key 160 level that keeps traders on intervention alert

• USD/JPY has seen a 159.59-160.09 range, on Thursday, according to EBS data

• An internal model shows USD/JPY should be trading well above 160

• There is scope for gains to retest the 2026 160.72 peak

• A break above 160.72 peak would put the Japanese authorities under pressure to act

• 30-day log correlation between USD/JPY and EUR/JPY is above +0.5 (pairs moving in tandem)

Daily Chart


Correlation Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• USD/JPY FX option premiums spiked higher as spot tests BoJ intervention resolve at 160.00

• Implied volatility higher - 1-week expiry jumped 5.0 to 7.0, 1-month from 4-year low at 6.3 to 7.3

• 1-week 10 delta butterfly spread high since 2020 at 2.9, 1-month 10 delta since 2022 at 1.8

• Risk reversals keep a high JPY call over put risk premium despite higher spot as intervention hedge

• Dealers also note demand for 161.00-162.00 strikes to hedge topside breakout if BoJ decide to wait

• Next big event is Friday's NFP - overnight USD/JPY implied vol gains exceed peers to flag heightened FX risk
USD/JPY 10 delta butterfly spreads


USD/JPY FX option implied volatility


Overnight expiry FXO implied volatility


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY sees very quick blip down from 159.99 to 159.59 EBS

• Case of market jitters, BOJ rate check, actual FX action?

• Nothing yet to suggest intervention but market jittery

• Hourly Ichimoku cloud between 159.70-87 crisscrossed

• Tech support below from ascending 200-HMA at 159.44

• Loads of option expiries today too down to 159.00, below

• Related comment , also , for more click on [FXBUZ]

USD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)