The Japanese Yen has weakened further to reach its lowest level against the US Dollar in almost 40 years, leading to the Japanese currency diplomat making a light threat of intervention.
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The USD/JPY currency pair has risen again for another to make another strong and significant bullish breakout to a new 39-year high price. Trend traders will already be long here for some time. The Japanese Yen has long-term weakness and has been a great gift in the Forex market to anyone going short of it. The problem is that the Japanese government / financial establishment does not want to see the Yen weaken quickly and they have already intervened a few times to try to prop up the Yen, which is not such an easy thing for a central bank to do. Just a few hours ago the Japanese "Currency Diplomat" Mimura made a veiled threat of intervention, in an attempt to cool the rise. However, the price is still near its high at the time of writing, so more substantial intervention to try to send the USD/JPY currency pair lower could be coming soon. Beware as this can puh the price lower by 200 or even 300 pips in a matter of minutes. However, most analysts don't see Mimura's threat as immediately credible.
Bitcoin is in focus as the world's largest cryptocurrency continues its long-term downwards trend which has been providing traders on the short side with profits for many months. When you see a trend like this, it is important to either follow it, or to trade against it if you must with extreme caution and minimal risk. It is easy to look at historic Bitcoin price charts and see that in the past few years, as a highly speculative asset, and so it is prone to respect long-term trends and technical levels. For these reasons, a short trade here following a breakdown below the support level at $58,254 would be attractive to me. The price is looking heavy on that support level, suggesting it will break down soon to reach a new 18-month low.
Crude Oil remains in focus as the talks between the USA and Iran look shaky and are being conducted indirectly, so the price continues to fall weakly and is now back in its area of comfort where it consolidated before the war. It could be that if a final US/Iran peace deal is reached, that would be a catalyst for even lower prices, but I am not sure it has much further to fall in the near term. Still, WTI is trading below $70 today, and its price action is quite bearish.
Equities are mixed, notably in Asia where South Korean and Japanese equities had such a strong quarter (South Korea logged its best quarter for exports since 1978) that institutions may be rebalancing out as Q3 of 2026 gets underway today. Still, most major indices remain relatively close to their record highs, so the strong rally seen throughout most of 2026 could reassert itself.
Precious metals such as Silver and Gold are still looking bearish with both looking likely to test their 7-month low prices. Silver is down by more than 50% from its peak made earlier this year, with both precious metals getting hammered by the tighter US monetary conditions. Trend traders prepared to short commodities will also be interested to be short here. I do not like to go short of commodities or equity indices.
In the Forex market, the US Dollar has made a new 13-month high although it is doing much better against some currencies than others. The Dollar is likely to retain some strength from a more hawkish Fed outlook since its policy meeting two weeks ago. The EUR/USD pair is in focus as trend traders will be looking to be short here as it falls again after making a new 14-month low last week. Trend traders will already be long of the USD/JPY currency pair as I explained in my first point. These two pairs have historically been the best to trade the US Dollar against, with GBP/USD and AUD/USD showing less long-term weakness. Since today's Tokyo open, the strongest major currency has been the British Pound, while the Australian Dollar is the weakest.
Yesterday's release of Canadian GDP data showed a slightly higher than expected month-on-month increase of 0.5%. This gave the Canadian Dollar a short-term tailwind, although it has given up most of its gains.
There will be a release today of US ISM Manufacturing data.