JPY: USD/JPY - Gaps Higher On Positive Shutdown Report
The Friday night range was 153.01 - 153.59, Asia is currently trading around 153.95, +0.35%. The pair has gapped higher on the Asian open as reports of a potential deal on the US shutdown make the rounds, reversing the short-term negative market sentiment on risk. USD/JPY found solid demand around the 153.00 area on Friday again, any confirmation of the shutdown ending would potentially see a knee-jerk higher in risk. In this scenario the focus would turn again to the resistance around the 154-155 area. A sustained break above here could potentially see the uptrend regain upward momentum as the focus would turn to the 160 area where I would start to become wary of intervention risks.
- Bloomberg reports, “ The LDP becomes more flexible in targeting budget surplus; CDP cites "fiscal discipline issues". On an NHK program on the 9th, LDP Policy Research Council Chairman Takayuki Kobayashi said, "Rather than being fixated on a single-year balance, we need to think about it a little more flexibly" regarding the target of achieving a primary balance surplus, an indicator of fiscal soundness.”
- Nikkei says, "Japan seeks to boost investment with upcoming economic stimulus. Japan's economic stimulus package is set to include tax cuts to spur investment focused around 17 key industries, including AI and semiconductors, and multi-year budget allocations to make policy more predictable, the Nikkei newspaper reported.”
- Options : Close significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : none - BBG.
- Data/Event : Leading Index
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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US: Trump Oval Office Announcement Underway Shortly
US President Donald Trump is shortly due to deliver an announcement in the White House Oval Office. LIVESTREAM The announcement is expected to relate to drug pricing and could follow a similar template to a recent pledge from Pfizer.
- The announcement will be Trump's first press remarks since a market-moving Truth Social statement earlier today in which Trump suggested calling off a meeting with Chinese President Xi Jinping and raising tariffs on China in response to new export controls from Beijing on rare earths. See earlier bullets here and here.
RATINGS: Moody's Completes Periodic Review Of Belgium, No Rating Action
No ratings actions for Belgium from Moody's, which is quoted in a press release on Bloomberg: "Moody's Ratings (Moody's) has completed a periodic review of the ratings of Belgium and other ratings that are associated with this issuer. The review was conducted through a rating committee held on 2 October 2025 in which we reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), and recent developments. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future."
- There had been some speculation there could be a ratings action - MNI wrote Thursday: "* Moody's on Belgium (Current rating Aa3, Outlook Negative): We expect Moody's to maintain their current stance in the absence of 2026 budget details."
MACRO ANALYSIS: US Macro Week Ahead: No CPI, But Plenty Of Pre-Blackout FedSpeak
Below is the week’s data schedule, with MNI’s annotation of whether or not data will be postponed.
- As we went to press, the Fed announced that next week's Industrial Production data will be postponed (was due to be published next Friday Oct 17) as the data “incorporate a range of data from other government agencies, the publication of which has been delayed as a result of the federal government shutdown.”
- We won’t be getting September CPI as scheduled on Oct 15, but at least the BLS announced it will publish the data on Oct 24.
- As such next week we’ll be looking at some under-covered data points, including the Redbook weekly and Chicago Fed’s CARTS retail sales data (in lieu of the Census Bureau retail sales report), with a little more focus than usual on regional Fed manufacturing indices (NY, Philadelphia).
- Once again, the dearth of tier-one data leaves Fed commentary in focus ahead of the pre-FOMC blackout period: highlights for us are Philadelphia Fed President Paulson making her first comments on monetary policy on Monday since being appointed in the summer, while as always Chair Powell bears watching on Tuesday (we also hear from Bowman, Waller, Collins, Miran, Schmid, and Musalem).
- Additionally we get the latest Beige Book which was already key given the FOMC was already increasingly focused on anecdotal information as it attempts to navigate murky economic waters.
