USD/JPY breaks its 157.50 floor and gold drops 2.6% to $4,028

The yen gained the most among the majors: on our feed USD/JPY fell 0.87% and closed below 157.50, the floor of a range FXStreet said had held for 12 sessions, and FXStreet tied the move to safe-haven demand as concerns over AI investments hit stocks. Gold fell 2.58% to $4,027.90, oil climbed toward $99 and USD/CAD posted a sixth lower close in a row.

What the data showed

• NZD · New Zealand third-quarter CPI: 3.7% on the year, against 3.8% expected and down from 4.1%, and 0.7% on the quarter against 0.8%, investingLive reported early in the session. It said the miss was too small to shift the outlook, with a Reserve Bank of New Zealand hike on 28 October still priced as near certain.

• USD · Initial jobless claims: 194,000 in the week to 17 October, against a 200,000 forecast, with the prior week revised up to 200,000, investingLive said.

The yen breaks out

• USD/JPY fell 0.87% to 156.761, after a low of 156.689 at 11:21 UTC. The pair closed below the 157.50–159.00 range that FXStreet said had held for 12 sessions, a move Action Forex described as a break below the floor of a four-week range. FXStreet tied the yen's rise to safe-haven demand as concerns over AI-related investments weighed on global equities, and said the pair was on track for its biggest daily decline in a month.

• Bonds rallied too: Treasury yields fell to one-month lows on safe-haven demand, Investing.com said, and after the close it reported that the 10-year yield had closed at a one-month low.

Gold and oil

• Gold fell 2.58% to $4,027.90 on our feed, with a low of $4,021.02 at 19:46 UTC, well below the $4,100 that had held on Wednesday. FXStreet said energy-driven inflation concerns reinforced expectations that interest rates would stay elevated for longer, despite a softer dollar and falling yields, and that at $4,053 in European hours gold was at its lowest since 4 August.

• WTI extended the rebound it began in Asian hours and traded around $99 by 12:30 UTC, up 1.40% and near five-week highs, according to FXStreet. ING said Brent traded back above $110 following new attacks on Saudi Arabia, and Action Forex said the catalyst for the day's sell-off in risk assets appeared to be a renewed risk of escalation in the Middle East.

The euro, the pound and the commodity currencies

• EUR/USD fell 0.15% to 1.12157. FXStreet said it reversed its early gains as the dollar rebounded from a three-week low, with French debt worries weighing, and that French bond spreads were near their 2011 crisis record.

• The pound edged up 0.04% to 1.33994 after a high of 1.34191 at 08:26 UTC, a third close above 1.3341, where Action Forex said a sustained break would raise the chance of a bullish reversal. Its low, 1.3355, also held above that line, and the close fell less than a pip short of 1.3400. Danske Bank now expects a Bank of England hike in November.

• USD/CAD fell 0.26% to 1.40098, its sixth lower close in a row, with a low of 1.40038 that stayed above the 1.3985 Action Forex targets. Investing.com said oil prices and Bank of Canada hike bets supported the loonie. Canada's producer prices rose 2.0% on the month in September, from 1.3%, and investingLive said markets priced an 80% chance of a hike on 28 October.

• AUD/USD slipped 0.12% to 0.70194, ending a run of four higher closes, and closed below 0.7024, the level whose sustained break Action Forex was watching. NZD/USD fell 0.32% to 0.56827, ending five higher closes after the softer inflation print. FXStreet said rising oil prices put both under pressure.

Market gauges and what's next

Our proprietary metrics at the close of the session:

• Readings: an MRS of 74, from 73. A CTS of 54 with its carry backdrop at 60 out of 100, and an FSI of 57, Neutral, from 55.

• Our strength table: no currency clearly led; the euro and the New Zealand dollar spent 290 and 278 of the session's 1,438 minutes in first place. The yen clearly trailed, with 22% of the minutes at the bottom, on the day it gained the most against the dollar: the table counts minutes in each place, not the session's net move.

• The dollar: it closed lower against the yen, the Swiss franc, the Canadian dollar and the pound, and higher against the euro and the Australian and New Zealand dollars. FXStreet had the Dollar Index at a three-week low near 101.45 in European hours.

• Last week's test: EUR/USD stayed between 1.1111 and 1.1276, the two lines our weekly wrap set, for a fourth session, and its low, 1.11885 at 14:17 UTC, held more than 77 pips above the lower one. The tell is still open.

Today: UK retail sales are due at 06:00 UTC, forecast at −0.1% on the month, followed by flash PMIs from France, Germany, the UK and the US.

After the close: Japan's September CPI rose 2.1% on the year, matching expectations, and 2.4% excluding fresh food and energy, against 2.3% expected, investingLive and Action Forex reported; our weekly wrap had cited Wells Fargo expecting Japan's inflation to rise to 2.3%, without naming the measure.