Where the price is. At the start of the European session, USD/JPY is holding around 157.85. Above, the nearest levels are 157.95, 158.85 and 159.45 (the 100-day average), below - 157.05.
Who said what. Shinichi Uchida, Deputy Governor of the Bank of Japan, spoke in place of central bank chief Kazuo Ueda and stated: the rate will continue to be raised as the economy, prices and financial conditions develop. Board member Junko Koeda added that the regulator should not be "excessively cautious": inflation risks are skewed to the upside, and the neutral rate (the level at which policy is no longer stimulating or restraining the economy) is noticeably above 1%. In other words, money in Japan is still cheap.
What the market is pricing in. Interest rate swaps (contracts used to assess the likelihood of a central bank decision) give only 4% for a hike in October, but 82% by December. At MUFG, they believe Koeda's words reinforce the course toward further policy normalization.
The other side of the pair. The US producer price index for September came in at +6.3% year on year versus a forecast of +5.3% - the highest since 2022. At the same time, Fed Chair Kevin Warsh declined to hint at a move in October: "I don't prejudge meetings."
Why this matters. The yield gap between the US and Japan is narrowing, and it is precisely this that drove USD/JPY up for years. While both central banks remain silent on specifics, headlines are doing the work for the yen: the next date on the calendar is October 30.
One hundred pips on USD/JPY - how much is that in money?
Officials speak on the yen at night and early morning Moscow time, and the pair manages to move a figure before breakfast. Catching such a move is not difficult; what's difficult is making money from it: with a deposit of a couple thousand, one hundred pips is dinner, not a result. Prop trading solves the question of notional differently: a paid challenge instead of a large personal deposit, then the company's account and a share of what you earn. There are two weeks until October 30 to figure out the mechanics without rushing.