• Cable eases to 1.3589 in early London trade, following month-end jump to 1.3612

• 1.3612 is the highest level since February 17 (1.3626 was the high that day)

• GBP/USD was sub-1.35 before Japan intervened to strengthen the yen on Thursday

• 1.3500 was low after BoE kept its policy rate at 3.75% on Thursday, by 8-1 vote

• Iran threatens painful response if U.S. renews attacks. Oil prices rise

• Trump lifts tariffs on UK whiskey to toast departing King Charles

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

May 1 (Reuters) - Japanese authorities' intervention on Thursday to shore up the yen delivered exactly the reckoning that weeks of complacent pricing deserved. USD/JPY had pushed to 160.72 — historically a trigger zone for intervention — before verbal warnings from Finance Minister Satsuki Katayama and currency diplomat Atsushi Mimura combined with reported official buying sent the pair tumbling to the mid-155s. The message was unmistakable. Implied volatility responded sharply. One-month vol surged from 7.7 at the London open to 9.25 — a dramatic repricing from Wednesday's four-year low of 6.7. But as spot has since consolidated in the high-150s and the immediate panic subsided, vol has retraced almost entirely, settling back near 7.8. On the surface, that looks like a return to calm.

The risk reversal market tells a different story. One-month 25-delta risk reversals — which had been trading at just 0.55 in favour of yen calls over puts early on Thursday, surged past 1.25 as the rout unfolded. They now sit around 1.35, the highest downside over upside strike premium since early March, and a meaningful step up from pre-intervention levels. The options market is not treating this as a one-and-done event. Mimura has warned that speculation remains rife, and his pointed reference to Golden Week — with Japanese markets closed from Monday through Wednesday — was a barely veiled threat. Thin holiday liquidity is precisely the environment that can turn a quiet tape violent. Tokyo has just shown it is willing to act; the skew reflects the market's view that it may well do so again.

Spot may look more settled, but the options market is keeping its guard up — and right now, that looks like the wiser posture. Related: FX options wrap - A reckoning for complacency
USD/JPY downside over upside strike risk reversal


USD/JPY FXO implied volatility


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY +0.3% in cautious Asia as Japanese markets wind down for Golden Week

• Rallied to 157.325 from 156.57 low on bargain hunting after 3.25% Thu slide

• Drifted back to 156.99 on fresh selling followed by consolidation

• Traders remain on intervention watch after Japan warns yen speculators again

• Core inflation in Tokyo stays below BOJ target for third month

• Japan's factory activitygrowth hits 4-year high on stockpiling, PMI shows

• Holidays in Asia affect liquidity; only Japan, Australia, NZ open Friday

• Japanese markets closed Mon-Wed; support 156.50, 155.50, res 157.50, 158.00
JPY:


Japanese yen jumps 3% after government steps into market:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• GBP/USD steady in Asia, hovers near a more than 2-month high traded on Thu

• Supported by broadly weaker dollar on Japanese intervention to boost JPY

• Buoyant risk appetite, lower oil prices boosted GBP; Dow up 1.2% at close

• BoE 's hawkish hold also buoys pound as bank warns on inflation threat

• Resistance at 1.3597, 61.8% Fibo of Jan-Mar decline being eroded

• Further resistance at 1.3650-60, 1.3700; support 1.3570-75, 1.3530-40

• Holidays in Asia limit activity; only Japan, Australia, New Zealand open Fri

• UK markets closed on Monday for early May bank holiday

• Range Thursday 1.3456-1.3612, Asia 1.3600-1.3609
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• EUR/USD +0.7% from Thur 1.1655 low on EU inflation concerns & weaker USD

• ECB holds but extensively debates raising rates & signals possible Jun hike

• DXY sharply lower following first JPY intervention in almost 2-years

• U.S. & Iran remain deadlocked, oil softer but Brent crude still above $112

• U.S. initial jobless claims 189k (poll 215k), Q1 GDP +2.0% (poll 2.3%)

• EUR bounces from 1.1650 support, needs break above 1.1850 to confirm upswing

• Range Asia 1.172425-34, support 1.1650 1.1409, resistance 1.1850 1.1930
EUR Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Shares of Evolution Mining jump as much as 4.5% to A$12.44, their strongest intraday rise since April 15

• The miner lifts group gold resources to 31 million ounces, underscoring a long-life, high-quality portfolio, with expansion studies adding upside and scope to grow copper beyond 4.2 million metric tons as exploration intensifies at Ernest Henry and Northparkes mines

• Adds that rising resources and reserves at Cowal project strengthen confidence in mineable inventory

• Despite the rise, Evolution stock still in on track to book a 4.9% decline over the week.

(Reporting by Kumar Tanishk in Bengaluru)

((; X: @thatstanishk Click here))

• USD/JPY +0.25% in Asia after closing 2.3% lower Thu on Japanese intervention

• Pair had dropped 3.25% from a 160.725 high to 155.50 on stop loss selling

• Japan's first official currency action in nearly 2 yrs effective, well-timed

• Complacent investors had amassed largest short yen position since July 2024

• Japan retail yen shorts were largest vs crosses since 2020, were vulnerable

• Japan's top FX diplomat says speculative moves seen in markets

• Core inflation in Tokyo stays below BOJ target for third month

• Japan's factory activity growth hits 4-year high on stockpiling, PMI shows

• Holidays in Asia affect liquidity; only Japan, Australia, NZ open Friday

• Japanese markets closed Mon-Wed for Golden Week; Asia range 156.57-157.305
JPY:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• NZD/USD +1.4% from Thur 0.5823 low, DXY lower in wake of JPY intervention

• Strait of Hormuz impasse continues, oil softens but WTI still above $105

• U.S. initial jobless claims 189k (poll 215k), Q1 GDP +2.0% (poll 2.3%)

• NZD approaching key 0.5930 inflection point, will be tough to break

• Futures pricing implies May RBNZ hike probability slipping below 34%

• NZ Q1 employment data Wed will provide pivotal input for expectations

• Range NZ 0.5904-10, support 0.5680 0.5580, resistance 0.5930 0.6090-95
NZD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +1.4% from Thur 0.71019 low after JP replaced jawboning with action

• Intervenes to prop up the flailing yen for the first time in almost 2-years

• RBA meeting outcome Tues, 25 bps hike likely, statement & forecasts pivotal

• U.S. initial jobless claims 189k (poll 215k), Q1 GDP +2.0% (poll 2.3%)

• U.S.-Iran deadlock continues, oil softens but remains highly elevated

• AUD challenge of major 0.7250-85 resistance zone increasingly likely

• Overnight range 0.7118-0.7203, support 0.6834, resistance 0.7250 0.7283
AUD Weekly 52-WMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Morgan Stanley Research previews the US ISM manufacturing index on Friday.

"We are tracking April manufacturing ISM at 52.9, with firm demand and continued output expansion signaling resilience. However, uncertainty around supply and prices keeps near-term risks tilted to the downside," MS notes.

"Regional surveys and the S&P flash PMI show solid output and new orders, alongside rising input costs from higher oil prices. S&P details also indicate worsening supplier delivery times, pointing to ongoing supply constraints amid Middle East geopolitical uncertainty," MS adds.

The euro rose against a broadly lower dollar after the European Central Bank held rates, as expected, while signaling it is leaning toward a June hike and as intervention by Japanese authorities lifted the yen.

Japan intervened for the first time in nearly two years, sources said, lifting the yen to a near two-month high versus the dollar as speculative shorts exited. The yen rise followed stern warnings from key Japanese officials that decisive FX action was nearing. European Central Bank President Christine Lagarde said euro-zone momentum has been hit by recent turbulence, leaving growth risks tilted to the downside, while inflation risks remain skewed higher. The Bank of England MPC voted 8–1 to hold rates, with Chief Economist Hew Pill dissenting for a hike to 4% amid uncertainty over Iran-related economic fallout. Oil eased after spiking above $126 on fears the U.S.-Iran conflict could disrupt Middle East supply, with U.S. military leaders set to brief President Donald Trump on potential military action against Iran. Iran warned it would launch “long and painful” strikes on U.S. positions if attacks resume and reaffirmed control of the Strait of Hormuz. Supply-side measures ease crude pressure with the U.S. possibly is pushing a coalition to secure maritime flows and plans to loan barrels from the U.S. reserves.

EUR/USD was lifted mainly by yen-driven dollar selling, but remains range-bound as the rebound from the 200-DMA stalls below 1.1754, leaving the tone neutral unless that hurdle breaks.

USD/JPY rebounded after reported Japan intervention drove it to a 155.50 two-month low, with improved risk sentiment helping the pair consolidate in a 156.00–157.83 cloud, though bears retain control below an upper Bollinger and key resistance near 158.

GBP/USD rose to a two-month high above 1.36, buoyed by broad dollar weakness tied to Japan FX action and the BoE’s hawkish hold.

AUD/USD firmed toward 0.72 as JPY-driven dollar selling and expectations of an RBA hike on May 5 kept the bullish structure intact, with a break potentially opening the way to 0.7222 and dips toward 0.7100–15 seen as buying opportunities.

Treasury yields eased as much as 5 basis points as the curve steepened. The 2s-10s yield spread rose 2 basis points to 50.4bp.

The S&P 500 was trading 1% higher following upbeat earnings and U.S. data.

WTI crude oil fell about 1.4%.

Gold rose 1.7% while copper was up 1.3%.

Heading toward the close: EUR/USD +0.52%, USD/JPY -2.47%, GBP/USD +0.96%, AUD/USD +1.17%, DXY -0.93%, EUR/JPY -2.00%, GBP/JPY -1.57%, AUD/JPY -1.38%.(Robert Fullem)

• AUD (1%) firms, USD on the backfoot after JPY intervention triggers dollar sales

• Spot pushing back into the 0.72 figure - level has repeatedly capped topside

• A convincing break here would open the door to the April high at 0.7222

• Policy tailwind firmly in play with an RBA hike expected on 5 May

• Dips into 0.7100-15 should continue to attract buyers, keeping bull structure intact
AUDUSD daily chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Danske Research reviews yesterday's April FOMC meeting.

"Powell announced that he will continue as a Fed Governor past his term as a Chair but did not specify for how long. This is hawkish on the margin, as it blocks Trump from nominating a potentially more dovish replacement, and means that Miran (who was the only dissenter in favour of a cut) will not continue as a Governor in June. Markets erased bets for further rate cuts and instead priced in a 40-50% probability for a rate hike during H1 2027. We maintain our relatively more dovish call with two cuts in Sep and Dec," Danske notes.

"We doubt that a more pronounced shift to the downside in EUR/USD will be triggered by hawkish Fed pricing alone. Instead, if risky assets begin to weaken more significantly as oil prices rise further, broad USD could benefit from renewed demand as a portfolio diversifier," Danske adds.

(Typo corrected)

By Justin McQueen

April 30 (Reuters) - The euro continues to hold its ground, bouncing off the 200-day MA yet again. Though resilient, spot has yet to break out of recent ranges. The weekly high at 1.1754 remains untouched, which needs clearing to shift the tone.

The real story today is JPY. Aggressive USD/JPY selling has done the heavy lifting for the euro, EUR/USD has essentially been a passenger. Intervention was confirmed by government sources, which is mildly interesting.

This feels like a tactical shift under Finance Minister Satsuki Katayama. Under former FX Chief Masato Kanda's framework, one market interpretation was that the trigger was a 10 yen move in a month, 4% in two weeks.

The latest episode appears different. USD/JPY was pinned in the 158-159 range since mid-March, and shortly after it poked above 160, officials stepped in. So, the market may conclude that levels matter now, not velocity, with 160 now likely a ceiling for the time being.

If so, that could somewhat limit the downside for EUR/USD by extension.

The European Central Bank were marginally more hawkish than the last meeting, but with a June hike fully priced, President Christine Lagarde had a high bar to out hawk the market.

Source reports post-meeting were clear: the discussions on policy was not if they hike, but appeared focused on when and by how much they ultimately tighten. The broader question though is whether hiking into a supply shock is actually currency-positive and the jury is still out on this one. Eventually it pulls forward the anticipated demand hit.

Technically, the level to watch is still the 200-day MA. While it continues to hold, repeated tests increase the risk of a clean break, and a flush below opens up 1.1600. To the topside, 1.1754 is the near-term pivot. Through here convincingly and 1.1830 (July 2025 high) becomes the next focal point.
USDJPY vs EURUSD


Justin McQueen is a Reuters market analyst. (The views expressed are his own) ((Email: ))

ANZ Research discusses Gold outlook.

"We expect gold’s price moves will hinge on developments in US-Iran negotiations in the short term. Constructive talks could stabilise energy prices and ease inflation worries. Conversely, renewed escalation would likely drive-up energy prices and inflation expectations. Persistent elevated energy prices will likely keep central banks cautious in easing monetary policy, which will support higher yield and a stronger USD. Such a backdrop would be negative for investment flows into gold," ANZ notes.

"We reiterate our view that gold will see further consolidation, with a negative bias in the short term as the market focuses on inflation and rates path. However, structural drivers are still supportive of further upside in the medium and long terms," ANZ adds.

• Cable has traded a 54 pip range since the BoE's 1100 GMT rate hold; 1.3500-1.3554

• 1.3554 is the highest level since Monday (1.3575 was the high that day)

• GBP/USD reclaimed a 1.35 handle during the London morning, as yen soared vs dollar

• Japan has intervened in FX market, Nikkei reports citing government source

• 155.50 was EBS low for USD/JPY at 1146 GMT vs 160.72 high at 0615 GMT

• U.S. commanders to brief Trump on military options against Iran, U.S. official says

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

Goldman Sachs comments on USD/JPY massive sell-off today.

"USDJPY falls sharply from this Asia afternoon as we head into a long weekend, with most of Asia off  tomorrow. 

Note Japan kicks off with golden week starting Monday to Wednesday 6th May. USDJPY last 156.70 (-2.5% from day's high of 160.72)," GS notes.

"USDJPY market volumes data - now around 57bio on the day, well above normal average Note, previous intervention volumes in 2022 and 2024, EBS volumes had gotten up to around 70 bio (for 29apr24 and 21oct22) Friday 23 January 2026 on US rate check day - EBS volumes got to around 50bio," GS adds.

Bank of America Global Research previews next week's May RBA meeting.

"We expect the RBA will hike by 25bps, but it's a close call. Inflation is above target and set to rise further, while the labour market remains too tight. However, the decision will ultimately depend on how the Board weighs upside inflation risks against downside growth risks, and we expect this debate will lead to a split decision. But the case to front-load hikes is stronger, as holding amid rising inflation could feed into expectations, pushing inflation higher," BofA notes.

"In our least likely scenario, a surprise RBA pause, we expect a more marked move in FX than rates given AUD longs appear quite crowded. AUD could slip below 0.70, but we would be buyers there," BofA adds.

• EUR/USD 0.31%, USD/JPY -2.26%, GBP/USD 0.41%, AUD/USD 0.7%

• S&P E-minis 0.37%, DAX 0.63%, Nikkei 225 -1.06%, FTSE 1.33%

• EUR/USD drops under big level as oil rockets to $126 per barrel

• USD/JPY falls from new 2026 peak as intervention worries bite

• GBP/USD weighed down by hawkish Fed, higher oil; BoE ahead

• AUD/USD respects 0.71 support level

• Option expiries . U.S. Open
(Martin Miller is a Reuters market analyst. The views expressed are his own)

(added missing word to title)

• USD climbed to a new 2026 peak versus the yen, Japan issued a new warning

• USD/JPY hit a 160.72 high in London, before dropping to 159.18, EBS data shows

• Yen neared intervention levels, keeping traders on edge

• Fin Min Katayama: the timing to take "decisive" action in the market was nearing

• The fourteen-week momentum reading suggests the underlying USD/JPY is positive

• 30-day log correlation between USD/JPY and EUR/JPY is well below +0.5 (relationship broken)

Daily Chart


Weekly Chart


Correlation Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

Oil is pushing higher amid fears of fresh Middle East escalation, adding a new layer of downside risk to EUR/USD and reviving demand for protection. FX options markets have already reacted. One-month implied volatility slumped to 5.50 this week, retracing all of its conflict-driven gains to hit its lowest since the fighting began, before rebounding sharply to 5.95 as fresh demand kicked in. One-month risk reversals have extended their recovery to 0.45 EUR puts over calls, reflecting additional risk premium for downside strikes over upside.

Yet EUR/USD's actual downside during the conflict has remained surprisingly contained — and that is the key to this trade.

That dynamic favours the EUR put Reverse-Knock-Out, or RKO — a structure that has been a go-to hedge since the conflict began and remains well-suited to the current environment.

While a vanilla EUR put gives the holder the right to sell EUR/USD at a set strike, adding a trigger below converts it into an RKO. The option remains live unless spot touches the trigger before expiry, at which point it expires worthless.

That knock-out risk is what makes it cheap — and crucially, pricing models assign a higher knock-out probability precisely because the downside volatility skew runs in the same direction as the strike, compressing the premium further.

The result is a structure that offers meaningful downside protection at a fraction of vanilla cost — ideal for those who fear escalation but expect EUR/USD declines to remain limited in scope.

With volatility rebounding, risk reversals skewed for puts and spot resilient, the RKO remains one of the most efficient ways to hedge EUR/USD tail risk right now.
EUR=EBS


EUR/USD FXO implied volatility


EURUSD RISK REVERSALS


(Richard Pace is a Reuters market analyst. The views expressed are his own)

(Adds link to option expiry calendar on line 4 )

• The cash hedging of huge, soon-to-expire FX options have been keeping a stranglehold on EUR/USD this week

• Billions in expiries anchored EUR/USD near 1.1700 through Monday, Tuesday and Wednesday's New York cuts

• EUR/USD mildly weaker since hawkish Fed and higher oil, but more expiries Thursday maybe limiting deeper FX declines

• There are EUR 1-billion at 1.1675, EUR 1.1 billion at 1.1690-1.1700 and 1.5 billion at 1.1725 for the 10-am New York cut

• However, the 1.1700 gravitational centre fades after Thursday's cut as the last of the big strikes roll off

• Friday brings fresh anchor points — 2.5bln euros expire 1.1640-50 which may underpin any deeper EUR/USD declines short term

• Related - FX options wake up to escalating war risks
EUR/USD FX option strike expiries April 27 - May 1


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY spot smashed above 160.00 Wed's, dragging 1-month implied vol up from a 4-year low of 6.7 to 7.6 since

• Traders are buying topside strikes toward 165.00 — hedging the risk that the JPY selloff has further to run

• But the 1-month 25-delta risk reversal tells a conflicted story — JPY calls meet demand at 0.55 vol above puts

• That is unusual — normally a surging USD/JPY would see demand for topside (JPY puts) dominate the skew

• The inversion signals intervention fear — the higher spot goes, the louder Tokyo's warning bells ring

• Owning JPY calls via the risk reversals or outright, would hedge the risk of a sudden JPY surge

• Options markets are caught between chasing the USD/JPY move higher and hedging the risk of a violent JPY rescue
USD/JPY 25 delta risk reversals


USD/JPY FXO implied volatility


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Cable falls to 1.3455 as Fed's hawkish tilt, higher oil prices buoy safe-haven dollar

• Brent oil rises 7% on report U.S. considering military options to break Iran deadlock

• 1.3455 is the lowest level since April 24 (1.3455 was also the low that day)

• BoE is expected to keep policy rate at 3.75% at 1100 GMT; hawk Pill to dissent

• 'Peak pound' may be over as multiple risks rise for UK markets

• 1.35 is now a GBP/USD resistance level (1.3493 was Asian session high)

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)