Japanese Yen Price Action Setups: USD/JPY, EUR/JPY, AUD/JPY

The Japanese yen was the weakest FX major on Tuesday following the election of Sanae Takaichi as Japan’s new Prime Minister. A hardline conservative, she is viewed as business-friendly, dovish on rates, and therefore a reason for traders to sell the yen again. However, the currency also faced pressure from easing tensions between the US and China after trade-positive comments ahead of the upcoming meeting between Trump and Xi.

 

 

 

Chart prepared by Matt Simpson - data source: LSEG

 

• Strong inflation saw the Canadian dollar outperform against the yen, sending CAD/JPY higher by 0.9%
• USD/JPY rose 0.8% during its best day in 10 weeks
• The Swiss franc reached a new record high against the yen on a daily-close basis
• The 0.4% gain on EUR/JPY suggests an important swing low was seen on Friday
• AUD/JPY rose for a third day, though its gains were the least impressive to suggest its upside potential from here could be capped

 

The Canadian dollar was the strongest FX major, with the US dollar a close second, following higher-than-expected CPI figures. Headline inflation rose to 3.2% in September (3.0% expected), with August’s reading also revised up to the same level. The trimmed mean measure beat expectations at 3.1% y/y versus 3.0% expected, leaving both key metrics above the Bank of Canada’s (BoC) 1–3% target range. Regardless, money markets still favour a 25bp cut from the BoC next week with an 86% probability, though the outlook for further cuts is now less certain.

 

 

 

Yen Weakness Extends as Takaichi Win Lifts USD/JPY, EUR/JPY and AUD/JPY

USD/JPY Technical Analysis: US Dollar vs Japanese Yen

The US dollar strengthened for a third consecutive session against the Japanese yen, with its 0.8% gain marking its best performance in two weeks. Bullish momentum has accelerated notably after Friday’s bullish hammer formed around the 150.00 handle, reinforcing the case for continued upside momentum.

The 4-hour chart shows a clean move higher into the monthly R1 and weekly R1 pivots near 152.33. A sustained break above this zone would assume bullish continuation, opening the path towards the 154.00 handle — aligned with the weekly R2 pivot (154.09).

Chart analysis by Matt Simpson - data source: TradingView USD/JPY

 

EUR/JPY Technical Analysis: Euro vs Japanese Yen

A similar setup has emerged on EUR/JPY, with bullish range expansion from the 2024 high and support from the 20-day EMA. While resistance has formed around the weekly R1 and monthly R2 pivots, price remains comfortably above the weekly pivot point — suggesting the broader uptrend is intact.

Bulls may look to buy dips towards 175.75, anticipating a break above 176.76 that could trigger a retest of recent cycle highs near the weekly R2 pivot around 177.93.

Chart analysis by Matt Simpson - data source: TradingView EUR/JPY

 

 

 

AUD/JPY Technical Analysis: Australian Dollar vs Japanese Yen

While the Australian dollar notched its third consecutive daily gain against the Japanese yen, AUD/JPY now appears to be approaching potential resistance, which could offer bears a near-term short setup. The daily RSI(2) is less than 10 points from its overbought zone (90 and above on this setting), and price is roughly one day’s average true range (ATR) from testing the January high.

The 4-hour chart shows resistance emerging near the weekly R1 pivot (98.75), with the January high (99.16) and weekly R2 (99.45) also close by — key levels for bears to watch for signs of a swing high. A bearish RSI(2) divergence has also formed, adding confluence to potential downside risk.

Chart analysis by Matt Simpson - data source: TradingView AUD/JPY

 

Key Economic Events for Traders (AEDT / GMT+11)

10:50 JPY Trade Report: Trade Balance, Adjusted Balance, Exports, Imports (Sep) (USD/JPY, EUR/JPY, Nikkei 225)
17:00 GBP Inflation Report: CPI, Core CPI, RPI, PPI, CPIH (Sep) (GBP/USD, EUR/GBP, FTSE 100)
19:30 GBP House Price Index (GBP/USD, EUR/GBP, FTSE 100)
20:00 EUR Belgium Consumer Confidence (Oct) (EUR/USD, EUR/GBP, DAX)
22:00 USD MBA Mortgage Applications, 30-Year Rate, Purchase & Refinance Indexes (Oct) (S&P 500, Nasdaq 100, USD/JPY)
22:00 EUR ECB’s De Guindos Speaks (EUR/USD, EUR/GBP, DAX)
23:25 EUR ECB President Lagarde Speaks (EUR/USD, EUR/GBP, DAX)
01:30 USD EIA Weekly Petroleum Report: Crude, Gasoline, Distillates, Refinery Utilization (WTI Crude, Brent Crude, USD/CAD)
04:00 USD 20-Year Bond Auction (S&P 500, Nasdaq 100, USD/JPY)