The Japanese yen rose in Asian trading on Friday against a basket of major and minor currencies, extending its gains for the fourth consecutive session against the US dollar and reaching its highest level in nearly two weeks. The currency was on track for a weekly gain following hawkish comments from Bank of Japan Governor Kazuo Ueda, which strengthened expectations of an interest rate hike in Japan before the end of the year.

The yen’s advance was also supported by a decline in the US dollar across foreign exchange markets, as well as by growing political activity among Japan’s opposition parties seeking to unite behind a consensus candidate for prime minister — a move aimed at ending the Liberal Democratic Party’s long-standing political dominance.

As a result, Sanae Takaichi faces mounting challenges on her path to power, especially after the sudden withdrawal of Komeito, the Liberal Democratic Party’s traditional coalition partner, which significantly weakens her chances and deepens political uncertainty in Japan during this critical period.

Price Overview

• USD/JPY fell by 0.35% to 149.90 yen — its lowest level since October 6 — from an opening of 150.42, after hitting a high of 150.43.

• The yen ended Thursday’s session up 0.4% against the dollar, marking its third consecutive daily gain following Ueda’s comments.

Weekly Performance

Over the course of the week — which officially concludes at today’s market close — the Japanese yen is up about 0.8% against the US dollar and on track to record its second weekly gain in the past three weeks.

Kazuo Ueda

Bank of Japan Governor Kazuo Ueda said in Washington on Thursday that the central bank remains prepared to raise its key interest rate if the likelihood of achieving its growth and inflation forecasts increases.

Japanese Interest Rates

• Following Ueda’s remarks, market pricing for a 25-basis-point rate hike by the Bank of Japan at its October meeting rose from 25% to 35%.

• The yen swap market now indicates a 50% probability of a rate hike by December, up from 41% before Ueda’s comments.

US Dollar

The US Dollar Index fell by 0.15% on Friday, extending losses for the fourth consecutive session and hitting a two-week low of 98.16 points, reflecting continued weakness in the American currency against a basket of global peers.

This decline came amid renewed trade tensions between the United States and China, as well as less hawkish comments from Federal Reserve officials that reinforced expectations for two rate cuts before the end of this year.

Political Developments in Japan

Japan’s political scene remains in turmoil following the resignation of Prime Minister Shigeru Ishiba on September 7 and the continuation of his cabinet in a caretaker role. Sanae Takaichi, leader of the Liberal Democratic Party, faces a steep challenge in her bid for the premiership after the sudden withdrawal of Komeito from the ruling coalition on October 10, which cost her party its parliamentary majority.

This development has opened the door for opposition unity, with the Constitutional Democratic Party — Japan’s largest opposition group — seeking to form an alliance with Komeito to support a consensus candidate, Yuichiro Tamaki, who is emerging as a strong contender to lead a united opposition bloc.

Although the Liberal Democratic Party remains the largest parliamentary group with 196 seats, its waning influence and the growing momentum of the opposition point to a possible political shift in the world’s fourth-largest economy.

Opinions and Analysis

• A note from Bank of America highlighted that attention is now turning toward the runoff in Japan’s prime ministerial election, which will take place in two rounds. The two candidates with the highest votes in the first round will advance if neither secures an outright majority. The note explained that if the House of Representatives and House of Councillors choose different candidates, the decision of the lower house will take precedence.

• The bank added that “despite the challenges facing the opposition in unifying their ranks, the three main opposition parties collectively hold more seats than the Liberal Democratic Party.” It emphasized the importance of monitoring ongoing discussions, including Komeito’s position, to determine which side it will support in the decisive runoff.

Bitcoin came under renewed pressure on Thursday, trading near 110,600 dollars and testing its main ascending trendline support. Rising geopolitical tensions and renewed trade friction between the United States and China have weakened risk appetite among investors, limiting momentum in high-risk assets.

According to a report from Copper Research, Bitcoin could retest the 100,000-dollar level before regaining upward momentum.

Slowing Price Recovery Amid Weak Risk Appetite

Bitcoin’s rebound slowed this week as escalating tensions between Russia and Ukraine, coupled with renewed trade disputes between Washington and Beijing, pushed the world’s largest cryptocurrency to around 110,600 dollars on Thursday.

US Defense Secretary Pete Hegseth warned Russia on Wednesday of “potential consequences” if it continues its aggression in Ukraine, while President Donald Trump said earlier this week that he is considering supplying Kyiv with long-range Tomahawk missiles.

Meanwhile, the US–China trade conflict deepened as both sides imposed reciprocal port tariffs this week. Trump described the relationship with China as a “full-scale trade war” and said he is considering halting cooking oil trade with Beijing in response to its refusal to buy American soybeans.

In contrast, Treasury Secretary Scott Bessent proposed suspending US tariffs on Chinese imports for more than three months if Beijing abandons its plans to impose strict export restrictions on rare earth elements.

This combination of geopolitical and trade conflicts between the world’s two largest economies has created uncertainty and risk aversion across markets — conditions that typically weigh on high-risk assets like Bitcoin.

Copper Report: A Healthy Corrective Pullback Possible

Copper Research’s Tuesday report suggested that historical patterns point to a potential short-term dip, projecting a retest of the 100,000-dollar level this month — near long-term support around the 52-week moving average. The firm noted that similar corrective phases occurred in 2014, 2018, and 2022.

The report stated: “A decisive break below the 52-week average would represent a structural market shift similar to those seen in 2014, 2018, and 2022, which is unlikely to occur before 2026.”

Fadi Abu Alfa, head of research at Copper, told FXStreet: “Despite recent market turbulence, Bitcoin’s movement remains consistent with long-term patterns converging near the 52-week average. With strong ETF inflows and supportive technical indicators, a temporary pullback toward 100,000 dollars should be viewed as a healthy correction rather than a cause for concern.”

Optimism Indicators: Funding Rates Fall to Lowest Since FTX Collapse

Despite pressure, some signs of optimism have emerged. A wave of leverage unwinding has triggered unprecedented stress in futures markets, with funding rates falling to levels unseen since the FTX collapse in late 2022.

Annualized funding rates have turned deeply negative, meaning traders are paying a premium to maintain short positions after excessive long positions were flushed out. This marks a sharp sentiment shift as participants reduce risk amid forced liquidations.

Historically, such extreme conditions often represent peak fear and the final phase of deleveraging — typically paving the way for a medium-term recovery.

Technical Outlook: Momentum Indicators Point to Further Correction

Bitcoin faced rejection at the 50-day exponential moving average (EMA) near 115,154 dollars on Tuesday, falling about 4% the following day.

At the time of writing, the price was trading around 110,600 dollars, approaching the ascending trendline.

If the price breaks and closes below the trendline, the decline could extend toward daily support at 107,245 dollars — close to the 200-day EMA at 108,084 dollars.

The Relative Strength Index (RSI) at 40 indicates growing bearish momentum, while the MACD has maintained a negative crossover since last week, reinforcing the corrective outlook.

On the upside, if the price regains strength, it may retest the 50-day EMA near 115,154 dollars.

Most US stock indexes rose during Thursday’s session amid strong demand for technology shares, particularly artificial intelligence companies.

US Treasury Secretary Scott Bessent said that President Donald Trump’s administration plans to intervene in certain sectors and impose minimum price floors on products in response to what he described as China’s “market manipulation.”

Amid ongoing trade tensions, China accused the US government of causing global alarm over restrictions on rare earth metal exports.

The third-quarter 2025 earnings season kicked off this week, with several major banks reporting strong profits and revenues.

This came despite the US government shutdown entering its sixteenth day with no signs of resolution. Bessent said the shutdown is costing the American economy 15 billion dollars per day.

Separately, Federal Reserve Board member Steven Miran said on Thursday that two additional interest rate cuts this year appear realistic, citing clear signs of a significant slowdown in inflation.

Miran added that while he personally favors a 50-basis-point rate cut at the upcoming meeting, he expects the Fed will instead opt for a 25-basis-point reduction.

As of 16:37 GMT, the Dow Jones Industrial Average rose 0.2% (83 points) to 46,337 points, the broader S&P 500 index gained 0.3% (18 points) to 6,689 points, and the Nasdaq Composite climbed 0.5% (112 points) to 22,782 points.

Bitcoin fell on Thursday, extending the pressure it has faced since last week’s sudden crash, as renewed US–China trade tensions fueled risk aversion and eroded investor appetite across cryptocurrency markets.

Digital asset traders remain extremely cautious after 16 billion dollars in long positions were liquidated last week, prompting them to avoid major short-term bets.

Still, Bitcoin stayed above last week’s lows, supported by some optimism over a potential US interest rate cut. The world’s largest cryptocurrency dropped 1.3% to 111,031 dollars as of 1:10 a.m. Eastern Time (05:10 GMT), after plunging to 103,000 dollars last week.

Bitcoin Under Pressure as Sentiment Weakens After Sudden Crash

Bitcoin and the broader crypto market have struggled to post gains this week following a record 16-billion-dollar long-position liquidation during last week’s flash crash.

The collapse was triggered by US President Donald Trump’s threat to impose 100% tariffs on China, which reignited fears of a full-scale trade war.

Washington and Beijing have remained sharply divided this week, with China vowing to retaliate in any trade conflict while US officials continue to push for further economic decoupling from Beijing.

Bitcoin has also been weighed down by profit-taking after reaching record highs above 126,000 dollars earlier this month.

The Crypto Fear and Greed Index published by CoinMarketCap slipped into “fear” territory this week, reflecting continued investor caution.

US Justice Department Seizes $15 Billion in Bitcoin in Fraud Case

The US Department of Justice announced on Wednesday that it had seized 127,271 Bitcoins — worth nearly 15 billion dollars — as part of an investigation into a major Cambodia-based fraud operation, marking the largest cryptocurrency seizure in history.

The department charged Chen Zhi, founder and chairman of Prince Holding Group, with wire fraud and money laundering, describing the organization as a “criminal empire built on forced labor and deception.”

Authorities said the operation was a type of scam known as “pig butchering,” in which fraudsters gradually gain a victim’s trust before convincing them to invest in fake projects.

This marks the largest Bitcoin confiscation in the Justice Department’s history, though it remains unclear how many coins the US government currently holds.

While the department has previously sold portions of seized coins on public markets, an executive order signed by President Trump earlier this year directs that such holdings be redirected to a government-managed “strategic Bitcoin reserve.”