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Dollar Hits 19-Month High on Fed Hike Bets as Yen Tests Intervention Risk Near 160

Dollar Surges, Yen Tested Global currency markets are dominated by US Dollar strength after a hot October CPI and hawkish Fed comments, including Governor Waller's call to consider a half-point hike, pushed the Dollar Index above 103.00 to its highest level since April 2025. USD/JPY came within sight of 160.00 before verbal intervention warnings and BoJ rate hike bets, backed by Japan's 7.1% wholesale inflation, pulled it back, AUD/JPY and EUR/JPY remain pressured below key moving averages, and the New Zealand Dollar slipped to around 0.5560 as traders priced a larger December Fed move. Traders are now watching New York Fed President Williams' panel appearance, Friday's US PPI, further Fed commentary and any Japanese official intervention signals for fresh direction. USD/JPY Forecast Current Price and Context USD/JPY drifted lower to around 159.65 during the Asian session on Thursday, 12 November 2026, retreating slightly from an over two-month high after the surge back toward the 160.00 psychological mark prompted verbal warnings from Japanese authorities. Japan's October wholesale inflation accelerated to 7.1% year on year against 6.5% expected, strengthening BoJ hike bets for December, although BoJ board member Asada said the central bank must be mindful of the economic effects of past rate hikes and a hawkish Fed keeps the pair supported. Key Drivers • Geopolitical Risks: US-Iran tensions and the energy-price swings tied to them influence USD/JPY through safe-haven Dollar demand and Japan's import costs, with energy imports up about 46% on the year in yen terms. • US Economic Data: Hot October CPI and a 10-year Treasury yield near 5% keep the US-Japan yield gap wide, and Friday's US PPI could extend Dollar strength if it confirms persistent inflation. • FOMC Outcome: Fed hike odds near 91% for December, with Waller opening the door to 50 basis points and Goldman Sachs expecting another hike early next year, keep the policy gap against the BoJ wide. • Trade Policy: No specific trade-policy catalyst featured in today's reporting, so changes in global trade conditions would affect USD/JPY only indirectly through Japanese export expectations and risk sentiment. • Monetary Policy: Japan's 7.1% wholesale inflation strengthens the case for a BoJ December hike, but Asada's call for cautious, gradual tightening and the Fed's hiking path limit how much the rate gap narrows. Technical Outlook • Trend: USD/JPY remains in a bullish phase after breaking above the 158.75 range top and testing an over two-month high near 160.00, though intervention risk limits chasing. • Resistance: Resistance appears at the 159.76 Fibonacci level and the 160.00 psychological mark, where Japanese authorities have previously signaled readiness to act. • Support: Initial support is the 159.00 area, followed by the 158.75 former range top and the 158.44 retracement level. • Forecast: USD/JPY could retest 160.00 if Fed hike bets keep building, but verbal intervention warnings and BoJ hike hopes could cap it, whereas a break below 158.75 would shift the bias toward 158.44. Sentiment and Catalysts • Market Sentiment: Sentiment favors USD/JPY bulls on yield differentials, but intervention risk near 160 and medium-term Yen strength calls from MUFG and ING keep traders from chasing rallies. • Catalysts: Williams' panel, Friday's US PPI, Japanese official warnings and BoJ communication could determine the pair's next move. AUD/JPY Forecast Current Price and Context AUD/JPY weakened below 109.50 during the Asian session on Thursday, 12 November 2026, as the Australian Dollar fell to near 10-month lows against a bullish US Dollar and the Yen drew support from BoJ rate hike bets and intervention risk. AUD/USD stayed below 0.6850 at an eight-month low, leaving the cross under its 100-day SMA with bearish momentum in place. Key Drivers • Geopolitical Risks: A firm safe-haven Dollar amid Iran risks weighs on the risk-sensitive Australian Dollar, while the Yen's own haven appeal and intervention risk add support for the cross's downside. • US Economic Data: Strong US data and a hot CPI lift Fed hike bets and the Dollar, which pressures AUD/USD and, through it, AUD/JPY, although Friday's US PPI could shift that balance. • FOMC Outcome: Fed hike odds near 91% and talk of a 50 basis point move strengthen the Dollar against the Aussie, with indirect weight on AUD/JPY through risk appetite and yield expectations. • Trade Policy: No specific trade-policy catalyst featured in today's reporting, so trade conditions affecting Australia's partners such as China would influence the cross only indirectly through sentiment. • Monetary Policy: The RBA's 4.85% cash rate keeps a wide yield advantage over the BoJ's 1.25%, but BoJ hike bets for December and Japan's 7.1% wholesale inflation could narrow that gap. Technical Outlook • Trend: AUD/JPY keeps a bearish near-term tone below the 20-day and 100-day SMAs, with bearish RSI momentum. • Resistance: Resistance appears at the 110.00 psychological level and the 20-day SMA near 110.30, followed by the 110.70-110.75 zone where the upper Bollinger band and 100-day SMA converge. • Support: The first downside target is 108.85, followed by the 108.64 October low. • Forecast: AUD/JPY could extend toward 108.85 if the Dollar stays bullish and the Yen holds BoJ-driven support, whereas a rebound above 110.00 would ease the bearish pressure. Sentiment and Catalysts • Market Sentiment: Sentiment toward the cross is bearish as a strong Dollar weighs on the Aussie and the Yen is supported by intervention risk. • Catalysts: Williams' panel, Friday's US PPI, Australian data, BoJ communication and Japanese official warnings could determine the cross's next move. EUR/JPY Forecast Current Price and Context EUR/JPY extended losses for a second successive day, trading around 176.90 during Asian hours on Thursday, 12 November 2026, slipping below the 177.03 nine-day EMA. The Euro is pressured by a strong US Dollar and French and ECB uncertainty while the Yen is supported by BoJ hike bets and intervention risk, leaving the cross near the 12-month low of 175.07 reached on 30 October. Key Drivers • Geopolitical Risks: Lower energy prices on US-Iran diplomacy would support the Euro as a net energy importer but also reduce Japan's import costs, whereas renewed escalation could lift safe-haven demand for the Yen and weigh on EUR/JPY. • US Economic Data: Hot US CPI and Friday's US PPI affect EUR/JPY mainly through global yields and risk sentiment, as higher US yields have pressured the Euro while weakening the Yen. • FOMC Outcome: Fed hike odds near 91% and 50 basis point talk support the Dollar against both currencies, so EUR/JPY direction depends on which currency the Dollar rally hurts more. • Trade Policy: No specific trade-policy catalyst featured in today's reporting, so changes in tariffs or trade restrictions affecting euro area exports would influence EUR/JPY only indirectly through growth expectations. • Monetary Policy: Hawkish ECB signals, including eurozone inflation at 4% and two hikes priced by mid-2027, compete with BoJ December hike bets, so relative tightening speed could decide the cross. Technical Outlook • Trend: EUR/JPY keeps a bearish near-term tone below its nine-day and 50-day EMAs within a descending channel, with the 14-day RSI near 46. • Resistance: Resistance appears at the nine-day EMA near 177.03, followed by the descending channel top near 178.20 and the 50-day EMA near 178.37. • Support: Initial support is the 12-month low at 175.07, followed by the channel's lower boundary near 173.60 and the 15-month low at 169.72. • Forecast: EUR/JPY could retest 175.07 if the Dollar rally continues and the Yen holds firm, whereas a reclaim of the nine-day EMA would reopen 178.20. Sentiment and Catalysts • Market Sentiment: Sentiment is capped as bearish momentum continues, although ECB hawkishness and the Euro's resilience near 1.1100 limit panic selling. • Catalysts: ECB speakers, euro area data, Williams' panel, Friday's US PPI and Japanese official warnings could determine the cross's next move. US Dollar Index (DXY) Forecast Current Price and Context The US Dollar Index (DXY) rose above 103.00 during the Asian session on Thursday, 12 November 2026, reaching about 103.06, its highest level since April 2025 as hot US CPI and hawkish Fed comments lifted December hike odds to around 87%-91%. Waller's call to consider a half-point hike and Goldman Sachs' expectation of another hike early next year support the rally, while Iran risks keep safe-haven demand in play. Key Drivers • Geopolitical Risks: Iran risks and mixed signals on peace talks keep safe-haven Dollar demand in play, although a diplomatic breakthrough could reduce it. • US Economic Data: October CPI of 0.4% with core at 0.3% was broad-based, and Friday's US PPI could extend the Dollar's gains if it confirms inflation pressure. • FOMC Outcome: Waller's hawkish message, scored 9/10 by FXStreet's Speechtracker, and Williams' panel later today could shape expectations for a 25 or 50 basis point December hike. • Trade Policy: No specific trade-policy catalyst featured in today's reporting, so tariff changes would act as an indirect risk for the DXY by shifting US growth and inflation expectations. • Monetary Policy: Fed hikes beyond December priced by brokerages such as Goldman Sachs widen the policy gap versus the ECB's 2.50% deposit rate and the BoJ's 1.25%, supporting the Dollar. Technical Outlook • Trend: The index holds a strong bullish bias after breaking to a 19-month high near 103.06, extending the rally from the 101.70 area earlier this week. • Resistance: Resistance appears at the 103.06 session high, with the 103.50 area as an indicative level above. • Support: Initial support is the 103.00 psychological level, followed by 102.49 and 102.00, with 101.70-101.65 below. • Forecast: The DXY could extend toward 103.50 if Williams and PPI reinforce Fed hike bets, whereas a pullback below 102.49 would signal exhaustion. Sentiment and Catalysts • Market Sentiment: Sentiment is strongly bullish on tightening expectations, although stretched positioning raises the risk of a sharp reversal if Fed commentary softens. • Catalysts: Williams' panel, Friday's US PPI, Treasury yields and US-Iran developments could determine the index's next directional move. NZD/USD Forecast Current Price and Context NZD/USD held losses near 0.5560 during Asian trading on Thursday, 12 November 2026, extending a two-day slide as the US Dollar outperformed and traders priced the possibility of a bigger Fed hike in December. The kiwi also faces headwinds from lower oil prices tempering RBNZ hike expectations and a recent seven-month low near 0.5527, with the political outcome of New Zealand's election still awaiting confirmation. Key Drivers • Geopolitical Risks: A safe-haven Dollar amid Iran risks weighs on the risk-sensitive kiwi, while any diplomatic breakthrough could ease Dollar demand and support NZD/USD. • US Economic Data: Friday's US PPI and the hot CPI backdrop could keep Fed hike bets elevated and pressure NZD/USD further. • FOMC Outcome: December hike odds near 91% and 50 basis point talk keep the Fed-RBNZ policy gap wide, which weighs on the kiwi. • Trade Policy: No specific trade-policy catalyst featured in today's reporting, so changes in tariffs or China-related demand would influence the kiwi only indirectly through growth and risk sentiment. • Monetary Policy: The RBNZ's 4-3 hold at 2.75% and lower oil prices reduce hike expectations, leaving the kiwi weak against a tightening Fed. Technical Outlook • Trend: NZD/USD keeps a bearish tone near the lower end of its recent range after two days of losses. • Resistance: Resistance appears at 0.5600, followed by 0.5630-0.5650 and the 50-day EMA near 0.5700. • Support: Initial support is 0.5550, followed by the 0.5527 seven-month low. • Forecast: NZD/USD could test 0.5527 if the Dollar rally extends, whereas a recovery above 0.5600 would ease the pressure. Sentiment and Catalysts • Market Sentiment: Sentiment toward the kiwi is weak as a strong Dollar and dovish RBNZ pricing outweigh election-related relief. • Catalysts: Williams' panel, Friday's US PPI, Fed commentary, oil price moves and New Zealand's final election outcome could determine the pair's next move. Wrap Up A surging US Dollar on hot US inflation and hawkish Fed signals is the dominant theme, pushing the Dollar Index above 103.00, testing the Yen near 160 and pressuring the Aussie, Euro and kiwi, while BoJ hike bets and intervention risk limit the Yen's weakness. Williams' panel appearance, Friday's US PPI, Fed commentary, BoJ communication, Japanese official warnings and US-Iran developments are the principal catalysts. Traders should monitor whether Fed officials back a 50 basis point December hike and whether USD/JPY approaches 160 intervention levels, remembering that every scenario in this report is conditional. Ready to trade global markets with confidence? Join Moneta Markets today and unlock 1000+ instruments, ultra-fast execution, ECN spreads from 0.0 pips, and more! Start now with Moneta Markets!

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Publication date:

2026-11-12 09:04:31 (GMT)

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