• USD/JPY has fallen from 160.69 to 159.44, on Wednesday, according to EBS data

• Rising tenkan line, the midpoint of the last nine trading sessions, supports at 159.38

• Spot remains on course for an eventual break above the 160.63 Fibo

• 160.63 Fibo is a 61.8% retrace of 163.99-155.20 intervention fueled drop

• EUR/JPY slump puts the September seasonal trend at risk

• BOJ Ueda signals chance of September rate hike, hawkish Takata call for "nimble" hike

• Bessent urged BOJ chief to combat weak yen with 'decisive' monetary steps

Daily Chart

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

• EUR/USD sank 1.1660 to 1.1577 after comments from Fed's Warsh on Aug 28

• Pair edges lower to 1.1574 on Sep 2 toward 100-DMA at 1.1567

• Pair should revisit Aug 13 low at 1.1512 if it falls below 1.1555

• Traders short euros covered $3bln of $8.5 short position in week to Aug 28

• Remaining $5.5 billion short will restrain EUR/USD downside

• There is room for a drop toward 1.1491 base 20-day Bollingers

•
EURUSD

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• FX options are forward-looking, volatility driven derivatives and can offer clues on FX sentiment

• Their price action shows a market getting more anxious about the downside risks to EUR/USD

• Recent trade flows have shown increased demand for EUR put/USD call options (downside strikes)

• These would benefit/protect those holding them if EUR/USD loses further ground

• One of many recent trades was a mid October 1.1400 strike on almost €1-billion late Tuesday

• Risk reversal contracts have increased premiums for EUR puts over calls - 1-week 25 delta paid 0.6 Wednesday

• The benchmark 1-month expiry risk reversal now 0.35 EUR puts over calls from a neutral bias last week

• Related - FX options wrap - Volatility premium plays down mounting FX risks
EUR/USD 25 delta risk reversals

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

Morgan Stanley Research previews the US August jobs report due on Friday.

"We had expected payrolls to decelerate from their March-May pace, but not quite as much as they did: July slowed sharply, exaggerated by local education payrolls, and earlier months were revised softer. We expect August payrolls reaccelerate slightly, with private payrolls rising 40k and headline payrolls up 65k, including a temporary rebound in those education payrolls," MS notes.

"We are assuming a 15k drag on payrolls from the revocation of Temporary Protected Status (TPS) for unauthorized Haitian mmigrants, which cancelled their work authorizations. The TPS-affected Haitians account for an estimated 160k of payrolls. Our forecast assumes about 10% lost employment by the time of the August payroll survey," MS adds.

• Shares of gold miners rise, as bullion prices bounce from a near one-month low [GOL/]

• Spot gold up 1.2% at $4,380.11 per ounce as the U.S. dollar and Treasury yields retreated from recent highs, while investors await U.S. payrolls data due later this week for cues on the Federal Reserve's policy path

• Top miners Newmont , Barrick Gold up 2.4% and 2.7%, respectively

• U.S.-listed shares of South African miners Gold Fields

rise 1.4%, Harmony Gold jump 2%, AngloGold Ashanti gain 1.3% and Sibanye Stillwater adds 8.7%

• Canadian miners Agnico Eagle Mines rise 1.5% and Kinross Gold add 3.1%

(Reporting by Pooja Menon in Bengaluru)

Credit Agricole CIB Research maintains a bearish bias on EUR/USD through year-end. 

"We maintain our bearish 6M EUR/USD outlook and do not expect the pair to recover on a sustained basis before H227....EUR/USD negatives to dominate in Q426 and H127:  The pair is trading as collateral damage of geopolitical risks – ranging from US-China tensions to the Ukraine war and the conflict in the Middle East. European political and fiscal risks could grow too, in the wake of the German regional elections this month and ahead of the French presidential elections in Q227.," CACIB notes.

"We continue to target a return for EUR/USD towards 1.13 by Q426 before a more sustainable recovery ensues towards 1.17 in Q427," CACIB adds.

Bank of America Global Research previews the US August jobs report due on Friday.

"Aug payrolls: We expect Aug payrolls to rise 40k (private: 35k), below consensus but consistent with another seasonally soft summer report. The unemployment rate should remain 4.1%, though a rebound in participation could push it to 4.2%," BofA notes.

Fed: A significantly weaker report could lower hike odds, but CPI remains the key release for determining whether the Fed follows through. We hold our call for Sept hike.

"Rates & FX: We see asymmetric risk: a stronger report is unlikely to materially increase September hike odds, but a weaker report could meaningfully reduce them by shifting focus back to the labor side of the mandate. We are long 5y, in 5y30y steepener (see Appendix) and tactically short USD (vs. NZD)," BofA adds.

Sept 2 (Reuters) - History suggests the euro tends to gain against the yen in September but the chance of this happening again in 2026 depends on a mixed technical outlook.

EUR/JPY's seasonal performance shows positive returns in 16 of the last 26 Septembers, or 62% of the time. However seasonality should not be viewed in isolation and is most useful when supported by other factors.

The Bank of Japan will debate raising interest rates including in September with a focus on whether inflationary risks were heightening, Ueda said on Tuesday, signalling a strong chance of a hike this month. That has put pressure on EUR/JPY, helping drive the cross lower at the start of September.

EUR/JPY's downside could be limited by the key 183.50 Fibo, a 38.2% retrace of the 179.44 to 186.02 August (EBS) rise, but a break and daily close under this level would shift the overall bias back to the downside. That would reduce the chance the cross ends September in positive territory.
Daily Chart


Daily Chart

(USD/JPY Martin Miller is a Reuters market analyst. The views expressed are his own. Editing by Louise Heavens)

• USD/JPY hit a 160.39 high earlier after first slumping on exporter sales

• It has since fallen back with moves lower accelerating into the Europe open

• Markets are on the thin side with many Japanese players having closed books

• Middle East and early European players may be behind the push down

• This follows the upside rejection at 160.39 and hawkish BOJ Takata-speak

• BOJ Gov Ueda also suggested a likely hike later this month

• US pressure on the BOJ to hike is intense, Japan's govt cannot object

• USD/JPY down to 159.44 EBS, to area of ascending 200-HMA at 159.44

• Ascending hourly Ichimoku tenkan at 159.37 just below, 159.30 low Aug 28

• Decisive break below bearish below the 200-HMA seen especially bearish

• Related comments , , also

• On Bessent-speak , BOJ Takata ,

• On BOJ Ueda-speak , for more click on [FXBUZ]

USD/JPY hourly:

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

• USD/JPY bid on USD haven flows, hawkish Fed narrative, Asia 160.14-39 EBS

• Japanese exporter sales early but to high later, sales resume from high

• USD/JPY holding above 160.03 100-DMA but below 161.29-162.64 daily cloud

• Cloud to descend rapidly however, to 160.89 tom, 160.59 Fri, 159.59 Mon

• $5.4 bln in option expiries today on 159 supportive, 160.00-20 $2.3 bln

• Downside looks to be well supported for now

• EUR/JPY tad heavy but essentially sideways near recent highs, 185.43-75 EBS

• At top of now descending 185.30-85 daily Ichimoku cloud

• Back into, towards base of 185.42-51 hourly Ichimoku cloud, 185.33 200-HMA

• Massive E1.1 bln in option expiries today at 183.80/82 out of mkt's range

• GBP/JPY less bid, 216.22-69, still in 215.97-217.02 descending daily cloud

• Has moved below 216.34-53 hourly Ichimoku cloud however, bias down?

• CHF/JPY also heavy, 196.97-197.40, lowest since 195.85 on August 19

• AUD/JPY tad heavy too, 114.22-67, off recent highs, follows NZD lower

• To area of ascending 200-HMA at 114.24

• NZD/JPY rips lower, 94.57 early to 93.39, into 93.21-94.04 daily Ichi cloud

• To area of 100-DMA at 93.49, follows RBNZ hike but central bank less hawkish

• Plenty of G20-speak but nothing definitive, BOJ Takata hawkish again

• Related comments , , also

• G20-speak , , BOJ Takata ,
USD/JPY hourly:


EUR/JPY hourly:


NZD/JPY hourly:

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

• GBP/USD down 0.1% in Asia, stays offered after closing 0.25% lower Tuesday

• Weighed down by risk aversion and rising oil prices which hit a 5-week high

• Investors lose patience with rising fiscal deficits globally

• Rising Fed rate hike expectations undermine GBP; odds of Sep 16 hike at 68%

• UK economic outlook improves but firms wary of investment, BCC says

• Strong double Fibo support at 1.3470-75, 100 & 200-day MAs converge @ 1.3443

• Resistance 1.3530, 1.3560; Tue range 1.3507-1.3558, Asia 1.3501-1.3514
GBP:

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

• AUD/USD +0.1% Wed as data reveals GDP beat expectations in the Jun quarter

• AU Q2 real GDP +0.4% q/q, +2.1% y/y (Reuters poll +0.3%, +1.8% respectively)

• Oil prices sharply higher after U.S. renews attacks on Iran, WTI +9.6% wtd

• AUD drift towards 0.7108 21-DMA less likely, sideways consolidation for now

• RBA's Sarah Hunter & Dr James Bishop appear before Senate Committee Thur

• Pivotal U.S. Aug non-farm payrolls due Fri, Reuters poll consensus +56k

• Range Asia 0.71385-535 support 0.6920 0.6866, resistance 0.7210 0.7282
WTI Daily 21-DMA


AUD Hourly Bollinger Study

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

• Australian gold stocks down as much as 4.8%, their lowest level since August 20

• Gold prices dropped more than 2% on Tuesday to a two-week low as elevated Treasury yields and a stronger dollar weighed on prices [GOL/]

• Shares of Northern Star Resources and Evolution Mining down as much as 5.5% and 5%, respectively, as both drop to a two-week low

• YTD, gold stocks up 0.1%, including session's moves

(Reporting by Subhalakshmi Dey in Bengaluru)

• Across the board USD strength sends USD/JPY back up into 160 handle

• Asia so far 160.15-23 EBS, resistance still felt above 160.20

• Japanese exporters, others good sellers 160.20+, 160.27 cap yesterday

• Flat 100-DMA at 160.03 to work as pivot going forward?

• Eyes too on daily Ichimoku cloud, today 161.29-162.64

• To descend rapidly to a line at 159.59 by weekend, early next week

• Good bounce from hourly Ichimoku cloud yesterday, now 159.75-78

• Hourly tenkan at 160.14, kijun below at 159.95, cloud 159.75-78

• Chock-a-block option expiries on 159 handle, total over $5.4 bln

• Large today between 160.00-20 too, total $2.3 bln, also supportive

• Only smattering of expiries above today to 161.00, $554 mln at strike

• US yields up o/n but JGB-US Tsy 2-year rate diffs off highs to @256 bps

• Market has plenty of G20-related news to digest, geopolitical news too

• Middle East military action, high crude prices to keep inflation focus

• Related comments , , ,

• And , also , on Middle East

• US markets , , ,
USD/JPY:


USD/JPY nearby option expiries this week:


JGB-US Treasury 2-year interest rate differential:

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

• NZD/USD -0.7% from Tue 0.5928 high despite expectations of RBNZ hike Wed

• Break below 0.5909 21-DMA a bearish signal that may bookend 9-week rally

• DXY & UST yields higher after U.S. renews attacks on Iran, WTI +5.2%

• Futures pricing now implies 67.5% probability of Fed rate hike in Sep

• Crucial U.S. Aug non-farm payrolls due Fri, Reuters poll consensus +56k

• Range NZ 0.58875-925, support 0.5821 0.5762, resistance 0.5995 0.6012
NZD Daily 21/55/100-DMA

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

MUFG Research previews this week's RBNZ and BoC September policy meetings.

"The RBNZ is set to hike while the Bank of Canada is likely to remain on hold. The RBNZ has been cautious on hiking rates from the current accommodative level (2.50%) but the inflation backdrop will compel action tomorrow especially given the renewed move higher in energy prices. Still, there is 100bps of tightening in the RBNZ OIS curve and we remain scpetical of the RBNZ delivering that amount of tightening over the next 12 months," MUFG notes.

"The Bank of Canada has other risks to consider following the escalation of the trade war with the US and the risk of auto, auto parts, steel and light & heavy truck tariffs being lifted from 25% to 50% at the start of 2027 will act to dampen Canadian corporate sentiment. The Canadian dollar will likely continue to underperform until there is clarity on tariffs in both direction," MUFG adds.

• AUD/USD -0.5% from Tue 0.71805 high, while DXY & UST yields grind higher

• U.S. launches fresh strikes on Iran, Brent crude +5.2% to $95.13 a barrel

• Futures pricing now implies 67.5% probability of Fed rate hike in Sep

• AU Q2 real GDP due Wed, Reuters poll consensus +0.3% q/q, +1.8% y/y

• AUD may drift toward 0.7108 21-DMA, break below may encourage short sellers

• RBA's Sarah Hunter & Dr James Bishop appear before Senate Committee Thur

• Pivotal U.S. Aug non-farm payrolls due Fri, Reuters poll consensus +55k

• Overnight range 0.7139-653 support 0.6920 0.6866, resistance 0.7210 0.7282
AUD Daily 21/55/100-DMA

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

• GBP$ soft heading into NY close, -0.24% at 1.3514; NorAm range 1.3558-1.3513

• Gilt yields rise, follow JGB yields to fresh 19-yr highs, UK fiscal angst weighs on GBP$

• US-Iran conflict back in focus send oil prices, inflation expectations higher

• Fed rate hike expectations remain at post-JHole highs; Sept Fed hike odds at 0.68%

• GBP$ supt 1.3513 Tuesday low, 1.3500 psychological lvl, 1.3443-36 multiple daily MAs

• Res 1.3558 Tuesday high, 1.3596 the 10-DMA, 1.3648 daily high August 26

GBP Chart:

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

Morgan Stanley Research previews Australia Q2 GDP report due on Wednesday.

"We expect GDP for Q2 to increase 0.5%Q, with annual growth slowing from 2.5% to 2.1%Y. This would be consistent with growth around trend rates, but only very modest per capita growth. We expect relatively broad contributions across categories. Consumer spending growth is expected to be similar to the prior quarter, with modest growth - a solid outcome given some of the income headwinds in the quarter," MS notes.

"Investment growth slowed sharply in the quarter although this entirely reflected a reversion of data centre machinery spending, the vast bulk of which was imported. We expect an offsetting positive contribution from trade (net exports+0.4ppts), with underlying capex trends still quite positive. Government spending is also expected to be a contributor to growth," MS adds.

Soft U.S. economic data and a lack of fresh catalysts are taking some momentum out of Tuesday's USD/JPY advance.

The pair has pulled back to 160 as the dollar eases after weaker-than-expected August ISM manufacturing and lackluster JOLTS data. An elevated ISM prices component should help preserve the Fed's hawkish bias, limiting the scope for a deeper dollar correction.

But the latest U.S. data does little to ease concerns over rising oil prices and expanding fiscal deficits keeping the yen defensive.

For Japan, rising debt burdens and higher interest rates remain particular challenges. Yen bulls expecting a more aggressive BOJ tightening path under U.S. pressure for hikes and higher domestic inflation risk being disappointed.

Government claims that fiscal discipline and stronger growth can resolve debt concerns remain unconvincing to many yen investors, while rising yields are also encouraging Samurai bond issuance, potentially adding support to USD/JPY if proceeds are converted into foreign currencies.

As such, USD/JPY remains cautiously bullish within the ascending channel that has been in place since the 155.20 intervention low.

While comments from Finance Minister Satsuki Katayama have kept intervention concerns alive and markets nervous above 160, a close above the upper Bollinger near 160.43 and channel resistance would expose the 61.8% Fibonacci retracement at 160.63 and the April 30 intervention high at 160.72.

Conversely, a break below 159.60 and the 21-day moving average near 159.08 would significantly weaken the bullish outlook.
Yen

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

Goldman Sachs Research previews the US August jobs report due on Friday.

"We expect a 40k increase in payrolls in August (vs. 55k consensus), in part reflecting a negative first print bias. Our forecast reflects a softer signal from alternative data. August payrolls have also shown a consistent negative bias—particularly in initial prints—over the last decade.

"We expect a 0.4% increase in average hourly earnings, reflecting positive calendar effects. AHE growth fell to just 3.2% year-over-year last month, and our broader wage tracker has stabilized in the mid-3s. We expect the unemployment rate to stay at 4.1%, reflecting a stabilization in continuing claims," GS adds.

Sterling looks vulnerable to further downside as it consolidates below 1.36, with bulls on the back foot amid heightened UK fiscal uncertainty, relentlessly rising long-end gilt yields and Middle East ructions lifting oil prices in a sign of persistent global inflation.

Amid subdued end-of-summer trading, cable found support near 1.3525, its recent trend lows.

The dollar strengthened following hawkish Federal Reserve policy expectations spurred by Chair Kevin Warsh's comments at the Jackson Hole Symposium last week. Adding to the dollar bid is the rise in global yields after Japanese yields climbed above 3% for the first time in 30 years. Sterling yields followed suit, rising 7 basis points and ticking a new multi-decade high at 5.26% as traders returned from Monday's UK Bank Holiday.

With oil rising, it seems increasingly likely that elevated inflation expectations globally are likely to persist. That may lift UK second-round inflation expectations, tempering optimism for a near-term recovery in Britain and further exacerbating fiscal concerns, which will add downside pressure to UK assets, including sterling.

Technically, sterling finds initial support at today's 1.3526 low, then 1.3475, the August 13 low, with more significant support at 1.3444-37, the 100-,200- and 50-DMA area. Bulls need a close above 1.3599, the flattening 10-DMA, to stall the mounting bearish outlook.
GBP$ Chart:

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

RBC Research summarizes its latest outlook and targets for Gold.

"We remain of the view that gold should spend most of its time in the $4500-5000/oz range for what remains of this year (a view unchanged and with high conviction), and we now specifically highlight our middle-to- high scenario range for Q3 and Q4 (as well as annual) for gold prices going forward," RBC notes.

"By year-end, we are leaning towards our 2026 high scenario ($4929/oz), and similarly, in 2027, we favor our high of $5296/oz. Regardless, our mid-to-high scenario range remains the most likely price band across our forecast horizon," RBC adds.

Bank of America Global Research notes that USD downside protection remains attractive, particularly versus EUR and CHF.