(Adds "bulls" to headline)

• NY opened near 1.1745 after 1.1719 traded overnight, rally extended in early NY

• Report that Iran sent its latest proposal to the US via Pakistan rallied risk

• USD, US yields , oil , USD/CNH all traded downward

• Gold , stocks silver rallied on upbeat risk sentiment

• EUR/USD hit an 8-session high of 1.1785, sellers then emerged as risk softened

• Pres. Trump said he is imposing tariffs on EU vehicles & isn't satisfied with Iran's proposal

• USD, yields & oil firmed up; EUR/USD neared 1.1730, was near flat late in the session

• Daily gravestone doji formed & daily RSI diverged on the high, are worries for EUR/USD bulls
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Credit Agricole CIB Research discusses the scope of Japan's MoF intervention on Thursday.

"The JPY surged yesterday following the first official FX intervention since 2024 as reported by the Nikkei news agency. The trigger was the push by USD/JPY above 160 that has already led to very strong verbal interventions from Minister of Finance Satsuki Katayama and Vice Minister of Finance for International Affairs Atsushi Mimura. Katayama said the MoF is nearing the time to take bold action in FX. Mimura went further and said it was his final warning before taking action," CACIB notes.

"The MoF could remain on high alert and may exploit the lower liquidity during the Golden Week holiday period and more favourable market positing to intervene again to support the JPY. Pushing the JPY in the opposite direction next week could be the rollout of US labour market and ISM data as well as Japan’s own labour earnings data. Keeping the BoJ hawkish is growing signs higher inflation and a tight labour market are leading to stronger real wages growth. If this were to continue, it would keep Japan’s rates market favouring a BoJ rate hike in June," CACIB adds.

• Cable holds above 1.3600 after positive start to May

• 1.3600 is a former resistance level turned support point

• Offers pre-1.36 capped GBP/USD gains in mid-April

• 1.3642 was 10-week peak as dollar softened on news from Iran

• Iran sends proposal for negotiations with U.S. to mediator Pakistan

• Next week's key UK event risk is local elections on May 7

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

MUFG discusses the scope of Japan's JPY intervention on Thursday.

"Yesterday we had the most explicit and strongest warning from the Vice Finance Minister for International Affairs, Atsushi Mimura, who gave a “final warning” over yen selling and the sudden and sharp drop in USD/JPY that followed was certainly indicative of intervention by the BoJ on behalf of the MoF. The five-big figure drop in USD/JPY is far too big a move on just rhetoric and the report from the Nikkei that intervention took place points strongly to intervention," MUFG notes.

"What this intervention does is provide some time for the BoJ to assess the uncertainties related to the conflict in the Middle East. There was an understandable reluctance to hike this week due to the lack of clarity and that reluctance coupled with the Fed being more hawkish opened up scope for a de-stabilising yen sell-off, possibly next week when Japan will be on vacation for Golden Week – Monday through Wednesday next week is a Japan holiday.

But with yen shorts not as extensive as in past intervention episodes there is a danger that this action does not have a lasting impact. An escalation in the conflict and/or a further rise in energy prices could see USD/JPY rebound quickly," MUFG adds.

• EUR/GBP treads water, pair still digesting yesterday's drop into the low 0.86s

• Pullback was likely more month-end flow related than a fundamental repricing

• Range lows 0.8600-15 still untested and holds significance

• Clean break below opens the 200-week MA at 0.8595

• May 7 local elections are a near-term GBP overhang

• That said, a weak Labour showing feels largely in the price

• Seasonal flows through May remain a GBP headwind though

• False break of 0.8590-0.8600 would likely be a dip-buyer trigger
EURGBP weekly chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Bank of America Global Research discusses the scope of Japan's JPY intervention on Thursday.

JPY intervention was likely sizeable…

"In line with our expectations, the BoJ struggled to deliver a "hawkish hold" which, alongside higher oil prices, pushed USDJPY above 160. On Thursday, an escalation of currency rhetoric by Japan officials, including FM Katayama, preceded a collapse in spot. The fact that USDJPY's sell off exceeded that of prior large USD selling interventions in '22 and '24 all but confirms reports of FX intervention," BofA notes.

… but '26 ≠ '24

"While the '24 interventions proved effective in hindsight (USDJPY fell ~13% between July and September), we expect the latest move to be less durable  Spillover to broader risk sentiment has been limited too, compared to '24, partly because yen-funded carry trades have been less prevalent, according to our metrics.

Fading JPY strength is akin to catching a falling knife, but prudent in our view, especially since historical interventions have tended to be one-off (no more than a couple of days) rather than persistent," BofA adds.

ANZ Research previews next week's May RBA policy meeting.

"Focus next week will be on the RBA meeting, where we expect a 25bp hike, taking the cash rate to a terminal 4.35%. OIS markets have assigned around a 75% probability of a hike. Beyond the decision itself, the voting split will be closely watched, particularly if the decision is close (such as a 5:4 or 6:3 split). The post-meeting press conference will also be watched for whether it was a hawkish hike, potentially signalling more hikes ahead, or if it was a more cautious ‘wait and see’ hike. This distinction will have implications for market pricing of RBA rate hikes and thus the AUD," ANZ notes.

"With markets already pricing close to three hikes in total (including 25bp for next week with a year-end implied rate of around 4.8%), we see scope for a reduction, particularly in the event of a cautious hike. In such a scenario, we see mild downside risks in the AUD/USD, with initial support at around 0.7150. Given market pricing, we think it will be difficult for the RBA to ‘out hawk’ the market, so we see limited upside from a hawkish hike," ANZ adds.

• AUD/USD hit a 10-session high of 0.7205 overnight; USD, US yield drops buoyed

• Sellers emerged however, 0.7184 hit in Europe, NY opened near 0.7190, pair was down -0.16%

• USD/CNH, oil gains & drops in gold , silver

weighed on AUD/USD

• A daily doji formed & daily RSI diverged on the high, could be concerns for AUD/USD bulls

• Consolidation of gains off April 13 low, rising monthly RSI give bulls some comfort however

• US April S&P Global and ISM manufacturing PMIs are data risks in NY's morning
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

By Justin McQueen

May 1 (Reuters) - After months of verbal jawboning, Japan finally delivered on its intervention threats after USD/JPY was sold aggressively from 160 to 155.50.

What is notable is the tactical shift under Finance Minister Satsuki Katayama. The old playbook under Masato Kanda, Japan's former top currency diplomat, was widely read as velocity-driven – a 10-yen move in a month, or 4% in two weeks.

This episode breaks that mold. USD/JPY had been grinding 158-159 for weeks and the moment it popped above 160, USD/JPY was hit. The takeaway here suggests levels are the trigger now, not speed. 160 is likely to be the ceiling until further notice.

So where does USD/JPY go from here? Judging by prior intervention episodes, USD/JPY has room to fall much further. Recall in July 2024 when we saw an initial drop from 162 to 158, before tagging 150 in short order and ultimately falling to 140. Sure, the Bank of Japan was hiking, and U.S. non-farm payrolls were falling fast, so there were amplifiers.

But the setup here implies that near-term risk-reward leans against fading the move lower. Today’s price action also suggests that another round of activity from the Ministry of Finance may have occurred. Thus, if it is willing to defend 160 on the way up, this emphasises that 160 is the line in the sand.
USDJPY 10 minute chart


USDJPY intervention episodes


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

May 1 (Reuters) - Japanese authorities need USD/JPY to close below a key Fibonacci level on Friday as that would help extend weakness into next week. The yen suddenly jumped against the dollar on Friday, a day after Tokyo authorities were widely believed to have intervened to prop up the Japanese currency. Japan's top currency diplomat Atsushi Mimura on Friday said speculation remained rife, a blunt warning that Tokyo is ready to step back into markets after intervening just hours earlier to prop up the embattled yen.

The volatile USD/JPY dropped from 160.72 to 155.49 in Friday's session on the EBS platform, to test the 155.50 Fibonacci level: a 61.8% retrace of the 152.28 to 160.72 (February to April) rise. 155.49 was the lowest level since February 25. A daily close below the 155.50 Fibo on Friday would be a bearish sign for USD/JPY.

The 61.8% retracement is known by some as the "golden ratio" in the sequence due to its outsized significance in determining the direction of the price action.

While direct intervention is a strong political tool to correct market forces, it usually does not change the long-term dynamics of a currency pair's direction.

Complicating the picture further: Japanese markets will be closed on Monday through Wednesday for the Golden Week holiday, which could cause wild swings in the yen due to thin liquidity, analysts say.
Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Cable jumped to 1.3621 high as USD/JPY slid to 155.49 EBS low at 0655 GMT

• 1.3621 is fresh ten-and-a-half week peak (1.3612 was Thursday high)

• GBP/USD was sub-1.35 before Japan intervened to strengthen the yen on Thursday

• 1.3500 was low after BoE kept its policy rate at 3.75% on Thursday, by 8-1 vote

• Markets currently see BoE's June rate decision as coin toss between hike/hold

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Cable eases to 1.3589 in early London trade, following month-end jump to 1.3612

• 1.3612 is the highest level since February 17 (1.3626 was the high that day)

• GBP/USD was sub-1.35 before Japan intervened to strengthen the yen on Thursday

• 1.3500 was low after BoE kept its policy rate at 3.75% on Thursday, by 8-1 vote

• Iran threatens painful response if U.S. renews attacks. Oil prices rise

• Trump lifts tariffs on UK whiskey to toast departing King Charles

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

May 1 (Reuters) - Japanese authorities' intervention on Thursday to shore up the yen delivered exactly the reckoning that weeks of complacent pricing deserved. USD/JPY had pushed to 160.72 — historically a trigger zone for intervention — before verbal warnings from Finance Minister Satsuki Katayama and currency diplomat Atsushi Mimura combined with reported official buying sent the pair tumbling to the mid-155s. The message was unmistakable. Implied volatility responded sharply. One-month vol surged from 7.7 at the London open to 9.25 — a dramatic repricing from Wednesday's four-year low of 6.7. But as spot has since consolidated in the high-150s and the immediate panic subsided, vol has retraced almost entirely, settling back near 7.8. On the surface, that looks like a return to calm.

The risk reversal market tells a different story. One-month 25-delta risk reversals — which had been trading at just 0.55 in favour of yen calls over puts early on Thursday, surged past 1.25 as the rout unfolded. They now sit around 1.35, the highest downside over upside strike premium since early March, and a meaningful step up from pre-intervention levels. The options market is not treating this as a one-and-done event. Mimura has warned that speculation remains rife, and his pointed reference to Golden Week — with Japanese markets closed from Monday through Wednesday — was a barely veiled threat. Thin holiday liquidity is precisely the environment that can turn a quiet tape violent. Tokyo has just shown it is willing to act; the skew reflects the market's view that it may well do so again.

Spot may look more settled, but the options market is keeping its guard up — and right now, that looks like the wiser posture. Related: FX options wrap - A reckoning for complacency
USD/JPY downside over upside strike risk reversal


USD/JPY FXO implied volatility


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY +0.3% in cautious Asia as Japanese markets wind down for Golden Week

• Rallied to 157.325 from 156.57 low on bargain hunting after 3.25% Thu slide

• Drifted back to 156.99 on fresh selling followed by consolidation

• Traders remain on intervention watch after Japan warns yen speculators again

• Core inflation in Tokyo stays below BOJ target for third month

• Japan's factory activitygrowth hits 4-year high on stockpiling, PMI shows

• Holidays in Asia affect liquidity; only Japan, Australia, NZ open Friday

• Japanese markets closed Mon-Wed; support 156.50, 155.50, res 157.50, 158.00
JPY:


Japanese yen jumps 3% after government steps into market:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• GBP/USD steady in Asia, hovers near a more than 2-month high traded on Thu

• Supported by broadly weaker dollar on Japanese intervention to boost JPY

• Buoyant risk appetite, lower oil prices boosted GBP; Dow up 1.2% at close

• BoE 's hawkish hold also buoys pound as bank warns on inflation threat

• Resistance at 1.3597, 61.8% Fibo of Jan-Mar decline being eroded

• Further resistance at 1.3650-60, 1.3700; support 1.3570-75, 1.3530-40

• Holidays in Asia limit activity; only Japan, Australia, New Zealand open Fri

• UK markets closed on Monday for early May bank holiday

• Range Thursday 1.3456-1.3612, Asia 1.3600-1.3609
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• EUR/USD +0.7% from Thur 1.1655 low on EU inflation concerns & weaker USD

• ECB holds but extensively debates raising rates & signals possible Jun hike

• DXY sharply lower following first JPY intervention in almost 2-years

• U.S. & Iran remain deadlocked, oil softer but Brent crude still above $112

• U.S. initial jobless claims 189k (poll 215k), Q1 GDP +2.0% (poll 2.3%)

• EUR bounces from 1.1650 support, needs break above 1.1850 to confirm upswing

• Range Asia 1.172425-34, support 1.1650 1.1409, resistance 1.1850 1.1930
EUR Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Shares of Evolution Mining jump as much as 4.5% to A$12.44, their strongest intraday rise since April 15

• The miner lifts group gold resources to 31 million ounces, underscoring a long-life, high-quality portfolio, with expansion studies adding upside and scope to grow copper beyond 4.2 million metric tons as exploration intensifies at Ernest Henry and Northparkes mines

• Adds that rising resources and reserves at Cowal project strengthen confidence in mineable inventory

• Despite the rise, Evolution stock still in on track to book a 4.9% decline over the week.

(Reporting by Kumar Tanishk in Bengaluru)

((; X: @thatstanishk Click here))

• USD/JPY +0.25% in Asia after closing 2.3% lower Thu on Japanese intervention

• Pair had dropped 3.25% from a 160.725 high to 155.50 on stop loss selling

• Japan's first official currency action in nearly 2 yrs effective, well-timed

• Complacent investors had amassed largest short yen position since July 2024

• Japan retail yen shorts were largest vs crosses since 2020, were vulnerable

• Japan's top FX diplomat says speculative moves seen in markets

• Core inflation in Tokyo stays below BOJ target for third month

• Japan's factory activity growth hits 4-year high on stockpiling, PMI shows

• Holidays in Asia affect liquidity; only Japan, Australia, NZ open Friday

• Japanese markets closed Mon-Wed for Golden Week; Asia range 156.57-157.305
JPY:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• NZD/USD +1.4% from Thur 0.5823 low, DXY lower in wake of JPY intervention

• Strait of Hormuz impasse continues, oil softens but WTI still above $105

• U.S. initial jobless claims 189k (poll 215k), Q1 GDP +2.0% (poll 2.3%)

• NZD approaching key 0.5930 inflection point, will be tough to break

• Futures pricing implies May RBNZ hike probability slipping below 34%

• NZ Q1 employment data Wed will provide pivotal input for expectations

• Range NZ 0.5904-10, support 0.5680 0.5580, resistance 0.5930 0.6090-95
NZD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +1.4% from Thur 0.71019 low after JP replaced jawboning with action

• Intervenes to prop up the flailing yen for the first time in almost 2-years

• RBA meeting outcome Tues, 25 bps hike likely, statement & forecasts pivotal

• U.S. initial jobless claims 189k (poll 215k), Q1 GDP +2.0% (poll 2.3%)

• U.S.-Iran deadlock continues, oil softens but remains highly elevated

• AUD challenge of major 0.7250-85 resistance zone increasingly likely

• Overnight range 0.7118-0.7203, support 0.6834, resistance 0.7250 0.7283
AUD Weekly 52-WMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Morgan Stanley Research previews the US ISM manufacturing index on Friday.

"We are tracking April manufacturing ISM at 52.9, with firm demand and continued output expansion signaling resilience. However, uncertainty around supply and prices keeps near-term risks tilted to the downside," MS notes.

"Regional surveys and the S&P flash PMI show solid output and new orders, alongside rising input costs from higher oil prices. S&P details also indicate worsening supplier delivery times, pointing to ongoing supply constraints amid Middle East geopolitical uncertainty," MS adds.

The euro rose against a broadly lower dollar after the European Central Bank held rates, as expected, while signaling it is leaning toward a June hike and as intervention by Japanese authorities lifted the yen.

Japan intervened for the first time in nearly two years, sources said, lifting the yen to a near two-month high versus the dollar as speculative shorts exited. The yen rise followed stern warnings from key Japanese officials that decisive FX action was nearing. European Central Bank President Christine Lagarde said euro-zone momentum has been hit by recent turbulence, leaving growth risks tilted to the downside, while inflation risks remain skewed higher. The Bank of England MPC voted 8–1 to hold rates, with Chief Economist Hew Pill dissenting for a hike to 4% amid uncertainty over Iran-related economic fallout. Oil eased after spiking above $126 on fears the U.S.-Iran conflict could disrupt Middle East supply, with U.S. military leaders set to brief President Donald Trump on potential military action against Iran. Iran warned it would launch “long and painful” strikes on U.S. positions if attacks resume and reaffirmed control of the Strait of Hormuz. Supply-side measures ease crude pressure with the U.S. possibly is pushing a coalition to secure maritime flows and plans to loan barrels from the U.S. reserves.

EUR/USD was lifted mainly by yen-driven dollar selling, but remains range-bound as the rebound from the 200-DMA stalls below 1.1754, leaving the tone neutral unless that hurdle breaks.

USD/JPY rebounded after reported Japan intervention drove it to a 155.50 two-month low, with improved risk sentiment helping the pair consolidate in a 156.00–157.83 cloud, though bears retain control below an upper Bollinger and key resistance near 158.

GBP/USD rose to a two-month high above 1.36, buoyed by broad dollar weakness tied to Japan FX action and the BoE’s hawkish hold.

AUD/USD firmed toward 0.72 as JPY-driven dollar selling and expectations of an RBA hike on May 5 kept the bullish structure intact, with a break potentially opening the way to 0.7222 and dips toward 0.7100–15 seen as buying opportunities.

Treasury yields eased as much as 5 basis points as the curve steepened. The 2s-10s yield spread rose 2 basis points to 50.4bp.

The S&P 500 was trading 1% higher following upbeat earnings and U.S. data.

WTI crude oil fell about 1.4%.

Gold rose 1.7% while copper was up 1.3%.

Heading toward the close: EUR/USD +0.52%, USD/JPY -2.47%, GBP/USD +0.96%, AUD/USD +1.17%, DXY -0.93%, EUR/JPY -2.00%, GBP/JPY -1.57%, AUD/JPY -1.38%.(Robert Fullem)

• AUD (1%) firms, USD on the backfoot after JPY intervention triggers dollar sales

• Spot pushing back into the 0.72 figure - level has repeatedly capped topside

• A convincing break here would open the door to the April high at 0.7222

• Policy tailwind firmly in play with an RBA hike expected on 5 May

• Dips into 0.7100-15 should continue to attract buyers, keeping bull structure intact
AUDUSD daily chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Danske Research reviews yesterday's April FOMC meeting.

"Powell announced that he will continue as a Fed Governor past his term as a Chair but did not specify for how long. This is hawkish on the margin, as it blocks Trump from nominating a potentially more dovish replacement, and means that Miran (who was the only dissenter in favour of a cut) will not continue as a Governor in June. Markets erased bets for further rate cuts and instead priced in a 40-50% probability for a rate hike during H1 2027. We maintain our relatively more dovish call with two cuts in Sep and Dec," Danske notes.

"We doubt that a more pronounced shift to the downside in EUR/USD will be triggered by hawkish Fed pricing alone. Instead, if risky assets begin to weaken more significantly as oil prices rise further, broad USD could benefit from renewed demand as a portfolio diversifier," Danske adds.