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JPY’s rare price gap points to sustained dollar downside

ADMIN || 26th January 2026

USD/JPY has been trading for a few hours today without being able to close the price gap from the end of business last week. That’s a rare event in spot markets and it typically marks a turning point.

The previous gap was triggered on Oct. 6 when Sanae Takaichi won the LDP leadership race. Indeed, dollar-yen continued to climb until it was interrupted with the Fed’s rate checks last week.

Meanwhile, today’s USD/JPY fixing by big Japanese banks is significant for signalling a stronger impulse by local corporates to sell dollars, than has been the case for several weeks. The fix was set around 154.85, which was in line with the spot rate, compared to being set at higher levels in recent sessions. Since then, dollar-yen is grinding lower.

Meanwhile, the downward trajectory for USD/JPY looks clearer given the profile for option strikes, which this week are lighter below 155 than they are above.

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