The yen fell to the upper ¥158 range against the backdrop of strong U.S. economic data. An increase in U.S. job openings, as measured by JOLTS, pushed up long-term U.S. interest rates, prompting yen selling and dollar buying based on the U.S.-Japan interest-rate differential.
In the Tokyo market early on the 4th, the yen weakened by approximately ¥0.94 against the previous business day to ¥158.68–69 per U.S. dollar, with yen selling and dollar buying dominant against the backdrop of higher long-term U.S. interest rates. In the previous day's New York market, the yen also ended trading about ¥0.75 weaker against the dollar, approaching its weakest level since mid-October.
The direct trigger for yen selling was the September JOLTS data released on the 3rd, which showed nonfarm job openings rising by more than 330,000 from the previous month to 7.523 million, well above market expectations. Long-term U.S. interest rates rose in response, spurring trading based on the interest-rate differential. Some market participants also viewed the rebound in AI-related shares and the rise in stock prices as a drag on the yen.
The yen also continued to fall against the euro, with EUR/JPY trading around the ¥177.60 range and EUR/USD in the $1.119 range. Some market participants believe the direction of the yen could change depending on the vote count in the U.S. midterm elections. The Australian dollar declined after an interest-rate hike, with AUD/USD trading in the upper 0.69 range.
As export profitability improves while import prices rise, yen selling driven by the U.S.-Japan interest-rate differential could affect companies' earnings outlooks and household purchasing power. Some market participants also believe the election results could trigger a short-term shift in exchange rates.