USD/JPY traded at 158.36 on November 9, just 0.40 yen below the previous week’s high of 158.76.

The ministry’s quarterly intervention breakdown showed dollar sales and yen purchases worth ¥7.9756 trillion on July 30, followed by ¥5.5523 trillion on July 31 and ¥1.8714 trillion on August 3. The first operation accounted for more than half of the ¥15.3993 trillion quarterly total. The disclosure did not identify an exchange-rate threshold that would trigger further intervention.

MUFG’s Tokyo head of global markets research, Teppei Ino, projected a 156–159 range for the week of November 9–13. His forecast was prepared in Japanese on November 6, before the US employment report and the intervention disclosure. The English version appeared on November 9.

Ino argued that US opposition to further yen weakness was unlikely to change materially after the midterm elections. In his assessment, that limited the incentive to establish fresh short-yen positions and could make a sustained move above the recent highs around 158.50 difficult.

Stronger US hiring revives December Fed hike expectations

The previous week illustrated how quickly USD/JPY could reverse above 158. Strong US data helped lift the pair to 158.76 on November 3. It then briefly fell below 157.50 during Tokyo trading on November 4 as the election count pointed to Democratic majorities in both chambers of the incoming Congress.

A semiconductor-led equity sell-off pushed the pair below 157.50 again on November 5. However, Ino noted that demand for the dollar as a haven helped limit the decline.

The November 6 US employment report subsequently strengthened the case for holding dollars. Nonfarm payrolls increased by 165,000 in October, including 159,000 private-sector jobs. Upward revisions added a combined 84,000 jobs to August and September.

MUFG senior currency analyst Lee Hardman highlighted the improvement in hiring: employment growth averaged 137,000 per month over the latest three months, compared with 28,000 over the preceding three months.

He nevertheless argued that an expanding labour force had helped contain labour-market pressure. Annual average hourly earnings growth remained near its lows for the year at 3.1%, despite October’s stronger monthly increase of 0.4%.

Hardman said markets had priced approximately 20 basis points of Fed tightening for December after the report. The November 10 US consumer inflation release would help determine whether those expectations persisted. A deeper sell-off in AI-related investments remained a potential obstacle: tighter financial conditions could give the Fed a reason to delay another increase.

BoJ opinions reveal differences over the pace of tightening

The Bank of Japan kept its policy rate at 1.25% on October 30 and judged underlying inflation to be broadly consistent with its 2% target.

The Summary of Opinions, published on November 10, showed support for further rate increases alongside disagreement over their timing. Some opinions favoured moving toward a neutral rate sooner, while others emphasised assessing the cumulative effects of previous increases and avoiding unnecessary pressure on activity.

Japanese producer prices provide another consideration. Goldman Sachs economists Yuriko Tanaka and Tomohiro Ota forecast a 0.3% monthly increase in October’s domestic Corporate Goods Price Index, which would be its first rise in three months. They expected annual growth of 6.6%, slightly below September’s 6.8%. The release is scheduled for November 12.

Goldman also highlighted the role of special payments in September’s wage figures. Nominal cash earnings rose 4.6% year on year, up from 3.9% in August and above the 3.8% consensus forecast. Base-pay growth was 3.7%, compared with 3.8% previously. Special payments increased by 32.6%, adding approximately one percentage point to headline wage growth. These payments are volatile, and the labour ministry attributed the sharp increase to a statistical quirk rather than a broad acceleration in bonuses.

What this means for USD/JPY

Ino’s pre-payroll assessment put the market-implied probability of a December BoJ increase at around 50%, after equity-market weakness prompted doubts about further tightening. That was a dated market estimate rather than a commitment by the central bank.

Board member Toichiro Asada is scheduled to speak on November 12. Having opposed September’s rate increase, he could reinforce expectations of a December hold if his comments remain cautious. Ino considered that a potential source of renewed selling pressure on the yen.

A cautious message from Asada, combined with US inflation data supporting another Fed increase, could encourage a retest of 158.76. Softer US inflation would reduce support for the dollar, particularly if Japanese policymakers signalled greater readiness to raise rates at their December 17–18 meeting.

The interaction between equity-market volatility and interest-rate expectations also featured in our previous USD/JPY analysis. MUFG’s 156–159 range remains a conditional weekly forecast, with policy signals from both countries central to whether the pair can move beyond it.