FX Analysis – JPY Bid on Ueda Comments, GBP Reclaims Key Level Ahead of Jobs Figures, AUD breaks range.

Comments from Bank of Japan governor Ueda over the week saw USDJPY gap significantly lower at the Asian session open. The pair now trading well under 147 from eight-month highs at Fridays close.

Ueda commented that the BoJ cannot rule out that they might have sufficient data by year-end to determine whether they can end negative rates, this brings the timeline forward of Japanese normalization, previously not signaled to begin until 2024. US-JPY rate differentials compressed on the news, with the predictable move in USDJPY to the downside.

USDJPY found some support at the 4H trendline and has retraced some of its losses in the EU session, hovering just below the key resistance level of 146.63, a resistance level that capped gains in the pair during August.

Key UK wage and jobs data released on Tuesday, is looking to show some cooling in the UK jobs market but probably not enough to avoid a September BoE rate hike. GBPUSD holding the major support at 1.2450 and continuing to rise, reclaiming the psychological 1.2500 level , and piercing trendline resistance to the upside. Tomorrows figure, if a big miss or big beat , should see some action in GBP as rate hike/hold odds adjust.

The Aussie dollar has surged today, AUDUSD breaking out of its tight September range and reclaiming the major S/R level at 0.6400. AUD gaining alongside the CNH after the PBoC set the strongest fix signal on record. Chinese data released over the weekend also showing the worlds second largest economy bouncing back from deflation.