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CAD/JPY's Clear Downside Momentum Exposes Bear Trigger

CAD
USCanadaMarketsStoryForeign Exchange BulletsNorth America

Weakness across CAD today (triggered partly by softer oil prices, but also by slipping global equities and tariff risk) is keeping the currency at the softer end of the G10 table, while solid JPY trade is pressuring CAD/JPY toward key support.

  • Today's 101.68 low coincides with key support of Y101.67 - the mid-2024 pullback low prompted by the BoJ's JPY-buying intervention last year. Clearance here would be resolutely bearish for the cross, opening levels last seen in 2023 and leaving the next key support at Y100 psychologically, and Y99.93, the 76.4% retracement for the upleg posted off the 2023 low.
  • The clear downward near-term momentum in the cross follows the Rengo pay tally from last week - underlining pay demands at their highest level in over 30 years for the 2025 Shunto round. While the March BoJ decision sees only an outside of a rate hike - but the May 1st meeting could be more consequential, for which the decision could be contingent on the Tankan survey on April 1, reports from the Bank’s branch managers' meeting on April 7, the updated Rengo tally in April, and CPI.
  • Should these factors fall into line, there's still much further for May BoJ pricing to go - a move that would certainly underpin this JPY strength.
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Weakness across CAD today (triggered partly by softer oil prices, but also by slipping global equities and tariff risk) is keeping the currency at the softer end of the G10 table, while solid JPY trade is pressuring CAD/JPY toward key support.

  • Today's 101.68 low coincides with key support of Y101.67 - the mid-2024 pullback low prompted by the BoJ's JPY-buying intervention last year. Clearance here would be resolutely bearish for the cross, opening levels last seen in 2023 and leaving the next key support at Y100 psychologically, and Y99.93, the 76.4% retracement for the upleg posted off the 2023 low.
  • The clear downward near-term momentum in the cross follows the Rengo pay tally from last week - underlining pay demands at their highest level in over 30 years for the 2025 Shunto round. While the March BoJ decision sees only an outside of a rate hike - but the May 1st meeting could be more consequential, for which the decision could be contingent on the Tankan survey on April 1, reports from the Bank’s branch managers' meeting on April 7, the updated Rengo tally in April, and CPI.
  • Should these factors fall into line, there's still much further for May BoJ pricing to go - a move that would certainly underpin this JPY strength.
image