US Interest Rates Fall Back, Canada Employment Ahead | Minkase Daily 10/9 (Fri)
Crude oil rose 3.6% while US long-term interest rates turned downward, and the dollar-yen was pushed back to the mid-157 yen range.
Please check out our other series as well
・Minkase Weekend (Weekend Report): Euro Weakest, FOMC Minutes This Week | Minkase Weekend 10/4 (Sun)
・Minkase Swap (Sunday Swap Comparison): Zloty 75 yen to 30 yen | Minkase Swap 10/4 (Sun)
・Goto-bi EA “basic510” Performance: Largest gain of the year | Goto-bi EA “basic510” September 2026 Performance
・Wemof Real Trade Results: Tried Wemof for 2 weeks | 15 trades, 14 wins, 1 loss, +76.7 pips (September 2026)
・Summary of Wakkyai’s Method “Wemof”: Summary of Wakkyai’s FX method “Wemof” and “Heaven-Bottom String Theory,” how to obtain it, and his own statements with sources
[1] Summary of the previous day’s financial markets (Thursday, October 8)
Closing prices of major assets (previous day’s NY close)
・USD/JPY 157.911 (-0.12%)
・EUR/USD 1.12158 (+0.12%)
・EUR/JPY 176.931 (-0.02%)
・GBP/USD 1.32289 (+0.12%)
・GBP/JPY 208.941 (-0.01%)
・AUD/JPY 109.871 (-0.18%)
・NZD/JPY 88.623 (-0.04%)
・Nikkei 225 69,042.11 (-1.42%)
・NY Dow 51,231.64 (+0.10%)
・S&P 500 7,765.36 (-0.47%)
・NY Gold $4,157.0 (+0.39%)
・WTI Crude Oil (Nov contract) $91.49 (+3.64%)
Major News
On the 8th, crude oil and US interest rates moved in opposite directions. Despite NY crude oil rising 3.6% due to reports surrounding Iran, the US 10-year Treasury yield turned downward during NY hours. The dollar-yen was pulled by those interest rates, being pushed back from the low 158 yen range to the mid-157 yen range.
During Tokyo hours, the dollar-yen dipped to around 157.58 yen due to yen buying ahead of the fixing, but immediately rebounded to the low 158 yen range. The previous day’s FOMC minutes lacked new clues, and no clear direction emerged.
In the afternoon, the British newspaper The Telegraph reported that US President Trump was considering an attack on Iran before the midterm elections, and NY crude oil climbed into the $90 range in after-hours trading. The yen was sold on the view that Japan’s trade deficit would expand due to higher crude oil prices, and the dollar-yen rose to 158.29 yen.
Prime Minister Takaichi stated that she respects the independence of the Bank of Japan to the fullest extent, while also expressing her view that the Japanese economy is not in deflation and is not in a phase requiring reflationary policies. She intends to continue the effort to limit new government bond issuance to around 40 trillion yen, the same level as after the fiscal 2025 supplementary budget, in fiscal 2027 as well.
Japanese stocks fell significantly for the second consecutive day. The Nikkei 225 closed at 69,042.11 yen, down 993.60 yen, hitting its low at the end of trading. In the afternoon session, Taiwan’s TSMC announced that its September sales were up 54.6% year-on-year but down 0.6% month-on-month, which led to increased selling in semiconductor-related stocks, and approximately 76% of stocks on the Prime Market declined.
During London hours, dollar buying supported by rising US Treasury yields was somewhat dominant. The US 10-year Treasury yield rose to the 5.35% level, the euro-dollar updated its intraday low to around $1.1182, and the dollar-Swiss franc hit a one-week high of around 0.8347. The dollar-yen also expanded its high to around 158.30 yen.
In European bonds, the yield spread between 10-year German and French bonds at 19:00 was 141 basis points, widening further from 139 on the 7th. The spread with Italy also widened to 116 basis points. European stocks fell across the board, with the German DAX at 24,806.97 (-1.18%), the French CAC 40 at 7,729.69 (-0.51%), and the UK FTSE 100 at 10,441.60 (-0.16%).
During European hours, central bank officials made a series of remarks. Fed Governor Waller stated that he expects additional rate hikes if indicators perform as expected, while also allowing for flexibility in timing by saying it does not need to be done at consecutive meetings. Swiss National Bank Vice Chairman Martin stated that there is no need to change the policy interest rate at this time.
At the Bank of England, Chief Economist Pill stated that monetary policy must deal decisively with inflation. Committee member Greene expressed concern about signs that UK wages will rise by around 3.5% next year, and Governor Bailey stated that the longer energy prices remain high, the higher the inflation risk becomes.
In the minutes of the September ECB Governing Council meeting released at 20:30, all members supported a 0.25% rate hike. The energy shock is lasting longer than previously assumed, inflation forecasts for 2027 and 2028 have been revised upward, and risks to the inflation outlook are also seen as tilted to the upside. Furthermore, the statement should have remained neutral and not suggested that they were in the middle of a tightening cycle or that this was the final rate hike.
What changed the flow during NY hours was President Trump. He stated that he would not attack Iran before the November 3 midterm elections, and combined with solid demand at that day’s 30-year bond auction, US long-term bonds were bought back. The 30-year bond auction had a high yield of 5.618% (when-issued trading 5.617%) and a bid-to-cover ratio of 2.54 times (previous 2.61 times).
US interest rates fell more significantly the longer the duration. The 2-year note was 4.754% (-0.015 from the previous business day), the 10-year note was 5.229% (-0.055), and the 30-year bond was 5.605% (-0.066), with the 2-year/10-year spread shrinking from +51 to +47 basis points, pausing the steepening. Some have pointed out that buying has finally begun to enter the global long-term bond market, which has been selling off for several months.
The dollar-yen plunged from the mid-158 yen range to 157.52 yen during NY hours and ended the day in the high 157 yen range. The euro-dollar fell to around $1.1170, then was bought back to the low $1.12 range as the dollar’s strength paused.
Strategists at major US securities firms are suggesting that if one is to sell the euro, the appropriate counterpart would be the high-interest Australian dollar or the safe-haven Swiss franc. The analysis is that France’s debt issues are weighing on the euro through a rise in risk premiums and a retreat in ECB rate hike expectations. The pound-dollar pair fell to the 1.31 dollar range before returning to the 1.32 dollar range, with 1.32 dollars being recognized as strong support.
St. Louis Fed President Musalem stated that the US economy is quite robust and the labor market is balanced, adding that he has not yet made a decision regarding this month’s FOMC.
Crude oil was swayed by news reports. US Axios reported that the Pentagon had instructed Central Command to complete preparations for resuming large-scale combat operations in Iran, and WTI November futures rose to 93.20 dollars in early regular trading. Although the gains were trimmed by President Trump’s remarks, the closing price was 91.49 dollars (+3.21, +3.64%).
NY gold December futures rebounded to 4,157.00 dollars (+16.30, +0.39%), supported by gold purchases by the People’s Bank of China and a decline in US interest rates.
US stocks were mixed. The Dow Jones Industrial Average rose slightly to 51,231.64 dollars (+51.77), while the S&P 500 fell to 7,765.36 (-0.47%) and the Nasdaq Composite fell to 27,193.34 (-1.25%).
The decline in the Nasdaq was triggered by reports surrounding OpenAI. It explained to investors that its annualized revenue as of the end of September was nearly 50 billion dollars, and the news that this was 20 billion dollars less than previously implied reignited concerns about whether the massive investments in AI can be recovered. Nvidia was -2.94%, AMD was -3.90%, and Oracle was -5.48%. The VIX index was 15.41 (+0.33).
Major Indicators: Previous, Forecast, Result
・Japan・August Balance of Payments・Current Account (seasonally unadjusted): Previous 2.9889 trillion yen / Forecast 3.1723 trillion yen / Result 4.062 trillion yen
・Japan・August Balance of Payments・Trade Balance: Previous -399.9 billion yen / Forecast -715.2 billion yen / Result -687.7 billion yen
・Japan・September Economy Watchers Survey (Current Economic Conditions DI): Previous 46.4 / Forecast 46.7 / Result 47.0
・Japan・September Economy Watchers Survey (Future Economic Conditions DI): Previous 48.3 / Forecast 48.5 / Result 47.4
・UK・September RICS House Price Balance: Previous -28 / Forecast -30 / Result -32
・Germany・August Trade Balance: Previous 21.6 billion euros (revised) / Forecast 19.0 billion euros / Result 19.5 billion euros
・Mexico・September Consumer Price Index (YoY): Previous 3.26% / Forecast 3.47% / Result 3.45%
・US・Initial Jobless Claims (previous week): Previous 199,000 (revised) / Forecast 200,000 / Result 197,000
・US・Continuing Jobless Claims (previous week): Previous 1.699 million (revised) / Forecast 1.700 million / Result 1.716 million
・US・August Wholesale Sales (MoM): Previous 1.0% (revised) / Result 1.8%
In Tokyo this morning, the balance of payments showed a current account surplus of 4.062 trillion yen, significantly exceeding the forecast of 3.1723 trillion yen. The trade balance was a deficit of 687.7 billion yen, which, while smaller than the forecast of 715.2 billion yen, represents a widening deficit from the previous month’s 399.9 billion yen.
If crude oil prices continue to rise, import costs are likely to increase, and yen selling linked to the expansion of the trade deficit was seen during Tokyo hours on the 8th. The relationship between crude oil and the yen is likely to be monitored whenever the situation in Iran shifts.
US initial jobless claims were 197,000, below the forecast of 200,000, indicating stability in the labor market. Continuing claims were 1.716 million, slightly above the forecast, but the market reaction was limited.
In the Economy Watchers Survey, the current conditions DI was 47.0, exceeding the forecast, while the future conditions DI fell to 47.4 from the previous month’s 48.3. Mexico’s September CPI was 3.45% year-on-year, almost in line with expectations.
Currency Strength & Rate of Change Top 5 (Day-over-Day)
・1st +CAD +0.17%
・2nd +CHF +0.11%
・3rd +GBP +0.04%
・4th +EUR +0.03%
・5th +JPY +0.03%
・6th +NZD +0.02%
・7th -USD -0.11%
・8th -AUD -0.11%
The range of the 8 currencies was 0.29 points, which narrowed significantly from the previous day’s 0.74. There were no currencies with double marks, indicating that it was a day with weak directional momentum.
What determined the shape was the weakness of the dollar. Due to the decline in US interest rates, the dollar sank to 7th place, and the other 6 currencies lined up in slightly positive territory. The leader was the Canadian dollar, which benefited from high crude oil prices, and even among resource-linked currencies, the Australian dollar was at the bottom, showing that the benefits of high crude oil prices are concentrated in the Canadian dollar.
・USD/CAD -0.24%
・AUD/JPY -0.18%
・USD/CHF -0.16%
・USD/JPY -0.12%
・EUR/USD +0.12%
Four of the top 5 were pairs involving the dollar that moved in the direction of dollar weakness. USD/CAD, USD/CHF, and USD/JPY fell, while EUR/USD rose, and in all cases, the dollar was on the selling side.
However, the maximum change was 0.24%, which was smaller compared to the previous day when all of the top 5 exceeded 0.4%. It was a day where, even if there were large fluctuations during the day, the closing levels did not deviate much from the previous day’s levels.
[2] Today’s Events (October 9 (Fri))
Economic Indicators & Event Schedule (JST)
・08:30 Japan: August All Households Survey – Consumption Expenditure (YoY) ★
・15:00 Norway: September Consumer Price Index (MoM) ★★
・15:00 Norway: September Consumer Price Index (YoY) ★★
・16:00 Turkey: August Industrial Production (MoM) ★
・16:00 Switzerland: September SECO Consumer Confidence Index ★
・21:00 Brazil: September IBGE Consumer Price Index (IPCA) (YoY) ★★
・21:30 Canada: September Employment Change ★★★
・21:30 Canada: September Unemployment Rate ★★★
・23:00 USA: October University of Michigan Consumer Sentiment Index (Preliminary) ★★
・25:00 Russia: September Consumer Price Index (MoM) ★★
Key Points for Today’s Market
The main focus is the Canada September Employment Report at 21:30. Employment change is expected to recover to a 10,000 increase from the previous 41,700 decrease, while the unemployment rate is projected to rise from 6.4% to 6.5%.
The Canadian dollar was the top performer in the strength/weakness rankings on the 8th. Ahead of the Bank of Canada meeting on the 28th, the market will test whether the tailwind of high oil prices will be bolstered or offset by the employment figures.
The University of Michigan Consumer Sentiment Index (October preliminary) at 23:00 is expected to show a slight decline to 47.6 from the previous 48.1. Since the NY Fed survey on the 7th just showed 1-year ahead inflation expectations rising to 3.9%, attention will also be on the expected inflation component.
Caution is also needed regarding position adjustments ahead of the weekend and the long holiday. The Tokyo market will be closed on the 12th (Mon) for Sports Day, and the US bond market will be closed for Columbus Day. A review of the UK’s credit rating is also scheduled.
Dollar-yen continues to range between 157.50 and 158.50 yen, and it found support again around 157.50 yen on the 8th. To the upside, the 200-day moving average in the mid-158 yen range remains a hurdle. For the 23:00 NY cut, an option expiry of $1.1 billion at 158.00 yen has been observed.
The US 10-year Treasury yield has continued to see selling pressure whenever it exceeds 5.35% since the start of October. Whether it can decline further from here will likely dictate the direction of the dollar as a whole. ECB Executive Board member Schnabel will attend a panel discussion at 22:30.
8-Currency Interest Rate Outlook
[3] Today’s Tidbits
ECB Minutes Did Not Write ‘Last Rate Hike’
The euro’s decline on the 7th was explained as being due to “fading expectations for additional ECB rate hikes.” The minutes of the September meeting released on the 8th only partially answer that explanation.
The rate hike itself was unanimous, inflation forecasts for both 2027 and 2028 were revised upward, and risks were seen as tilted to the upside. Reading just this, there is plenty of room left for additional rate hikes.
On the other hand, the minutes requested that the statement remain neutral, suggesting neither that the tightening cycle is in progress nor that it is the final hike. It is written in a way that avoids committing to a future path, securing room to decide meeting by meeting.
The market’s reaction was calm. Although euro-dollar recovered to the 1.12 dollar level during NY hours, that was due to dollar weakness, and the German-French spread remains wide at 141 basis points. The structure where the euro is weighed down more by France than the ECB has not changed in the minutes.
US 10-Year Treasury, Pushed Back Before 5.35%
The US 10-year Treasury yield rose to the 5.35% level during London hours on the 8th, but fell to around 5.22% during NY hours. Since the start of October, there have been repeated movements where the rise stops once it exceeds 5.35%.
It is also noteworthy that auctions have provided support for two consecutive days. The 10-year note auction on the 7th was strong, with a high yield of 5.300% coming in below the 5.317% when-issued yield, and the 30-year bond auction on the 8th was also absorbed without collapsing significantly.
The high level of long-term interest rates is also a headache for the US government. The 30-year fixed mortgage rate, the mainstay for home loans, has reached 7.4% according to Freddie Mac.
Regarding the relationship with foreign exchange, there is a view that if the US 10-year Treasury yield falls below 5.15%–5.20%, a correction in the dollar’s strength will become clear. Whether the dollar-yen pair holds steady in the 157 range or tests lower levels along with interest rates will likely depend on this level as a key benchmark.
──────────────────────────────
This newsletter is distributed by Shikauchi (Editor-in-Chief of the magazine ‘Foreign Exchange’) in a personal capacity. It is intended for informational purposes only and does not constitute investment advice or recommendations to buy or sell. Please make final investment decisions at your own risk. This newsletter only covers information from domestic firms registered with the Financial Services Agency.