USD/JPY pushed back above the 155.00 level as 10-year Treasury yields hit their highest since 2007. Markets now overwhelmingly price a 25 bps Fed rate hike this Wednesday, while separate Elliott Wave analysis flags a more than 700-pip slide already underway with further downside projected.
USD/JPY climbed back above 155.00 to a one-week high as the bond market continued to drive broader currency moves. Ten-year Treasury yields reached 5.03%, their highest level since 2007, as the global bond selloff gathered pace. German and French bond yields also accelerated higher, so the move is not purely a US story.
Rate Hike Bets Build Ahead of Wednesday
Oil prices pushed higher on geopolitical tensions, reviving inflation fears. As a result, markets are now overwhelmingly pricing in a 25 bps rate hike from the Fed at Wednesday's meeting. That expectation has underpinned the dollar since the start of the week.
Since early September, the so-called "Bessent put" had pulled USD/JPY back down before it consolidated below 155 last week. But traders are growing anxious again as the broader macro story tightens its grip. The pair's next move depends less on the Fed simply delivering the expected hike and more on what policymakers signal comes next: if the Fed reinforces that inflation remains a problem and keeps the door open to further tightening, yields could stay elevated and continue to support USD/JPY. Markets are already looking past Wednesday, with expectations building that the hike may not be a one-and-done move.
Elliott Wave Count Flags a Sharper Reversal
Separate technical analysis from ActionForex shows USDJPY sliding more than 700 pips after completing a corrective bounce near the 161.00 handle. The pair then broke lower from a 160.364 peak in a five-wave impulse, with wave 5 completing around the 152.50 level.
USDJPY is now in a corrective rally that has lifted price from a 153.00 floor to near 154.67, with the count projecting the recovery could extend toward the 155.03–156.15 zone. Once that corrective leg completes, the broader bearish cycle is expected to resume, potentially driving the pair toward the 151.56–146.11 area.
Sources: Investinglive, ActionForex
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