The US Dollar has dropped to a weekly low of around 152.85 after being turned back at 153.50. This drop comes amidst a turbulent market and a focus on the US Michigan Consumer Sentiment Index. The Japanese Yen weakened during Asian trading due to disappointing household spending data, which rose just 1.8% year-on-year in September, compared to the expected 2.5%. Japanese PM Takaichi stated that the economy is halfway to achieving sustainable price growth, raising questions about the Bank of Japan’s plans for an interest rate hike in December.

Weekly Loss Prediction for USD/JPY

USD/JPY is expected to see a 0.6% weekly loss. This prediction is based on mixed US employment data and comments from Japanese Finance Minister Katayama regarding currency volatility. There is also growing attention on US Federal Reserve member Philip Jefferson after the release of disappointing jobs data. The Michigan Consumer Sentiment Index, which gauges consumer spending willingness, affects the economic outlook; a low reading is typically negative for the USD. The forecast for the next release is 53.2, down from 53.6 previously. Overall, consumer sentiment plays a crucial role in spending and growth, which in turn influences the Federal Reserve’s policies. Traders find this data significant as it reflects how consumers feel about their finances and shopping conditions.

Economic Effects of Consumer Data

As of today, November 7, 2025, the US Dollar is weakening, pushing the USD/JPY pair down from the 152.50 level. This shift is largely due to the preliminary Michigan Consumer Sentiment report for November, which came in at 50.3, much lower than anticipated. This figure is historically weak, approaching the all-time low of 50.0 from mid-2022, raising serious concerns about the US economy’s health. This disappointing consumer data adds to last week’s lackluster jobs report, which revealed that the US economy added only 150,000 jobs – far below expectations. With signs of weakness in both consumer sentiment and the labor market, the Federal Reserve is less likely to feel pressured to maintain high interest rates. This outlook is negative for the US Dollar, suggesting that selling rallies in USD/JPY may be a wise strategy in the coming weeks. However, the Japanese Yen faces its own challenges, which is limiting any drastic drop in the USD/JPY pair. Recent data indicates that household spending in Japan grew only 1.8%, missing expectations and raising doubts about the Bank of Japan’s ability to hike its benchmark interest rate from -0.1% in December. This weakness in the Yen indicates a support level for the currency pair, leading to a turbulent, range-bound market. For derivative traders, this situation suggests that the pair may be limited on the upside due to potential government intervention, similar to what occurred in 2022 and 2024 when rates exceeded 152. To take advantage of the limited upside, selling call options or implementing bear call spreads with strike prices around 153.00 or higher could be effective. On the other hand, for those predicting further deterioration in US economic data, buying put options provides a low-risk opportunity to benefit from a potential drop below the current range. Create your live VT Markets account and start trading now.

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