Overnight Summary

The yen dominated overnight, ripping higher against every G10 counterpart as a violent unwind in carry trades collided with a crude oil rout that sent Brent down 7.3% and WTI off 5.4%. Gold rallied 1.5% to $4,111, reinforcing the safe-haven bid that fuelled JPY demand. Copper climbed 1.7% — a divergence from oil that kept AUD losses contained at -0.34% against the dollar rather than something worse.

DXY itself barely moved, adding 0.16% to 99.96. The dollar index stalled because the yen strength story was a JPY story, not a USD story — EUR/USD, GBP/USD, and NZD/USD all stayed inside 0.25% ranges. The action was entirely concentrated in yen crosses, where AUD/JPY led the carnage at -2.26%.

Key Pair Breakdown

AUD/JPY (109.97, -2.26%) — The biggest mover of the session. Copper’s 1.7% gain couldn’t offset the yen tidal wave, and the pair gave up the 112 handle entirely. A close below 110 puts the post-April range floor in focus. This is the bellwether for carry sentiment right now.

GBP/JPY (211.01, -2.13%) — Sterling-yen dropped through 211 after trading above 215 last week. The pair is one of the highest-yielding G10 carry trades, and the speed of the unwind suggests leveraged positioning got caught. A move toward 210 would mark the lowest print since mid-July.

CAD/JPY (111.87, -2.13%) — The oil crash added an extra layer of pressure here. WTI down 5.4% hits the Canadian dollar on its own, and stacking that onto yen strength produced a move nearly identical in size to GBP/JPY. The pair traded in a tight band above 114 for most of last week — that range is broken.

EUR/JPY (180.87, -2.01%) — Fell below 181 for the first time in weeks. EUR/USD was flat, so this was pure yen buying. A push below 180 would likely trigger another wave of stop-driven selling in what has been a crowded long-carry position.

NZD/JPY (92.22, -1.99%) — Tracked AUD/JPY lower with nearly identical percentage losses, maintaining the usual Antipodean correlation. NZD’s smaller yield premium versus AUD offered no buffer.

USD/JPY (157.16, -1.89%) — The benchmark pair fell nearly two full big figures. 157 is the first support shelf, but the momentum profile suggests 155 is in play if risk-off persists through the Asian session. A move of this size in USD/JPY often pulls the rest of the complex further in the same direction over the following 24 hours.

USD/SEK (9.5508, +0.51%) — The krona weakened against the dollar in a classic risk-off pattern — SEK tends to underperform when equity volatility spikes. The move is modest relative to the JPY chaos but worth tracking if Scandinavian positioning is extended.

USD/CHF (0.80943, +0.45%) — An interesting divergence from the typical safe-haven playbook. The franc weakened against the dollar even as gold rallied and yen surged. EUR/CHF rose 0.36%, suggesting franc sellers were hedging euro exposure rather than chasing the haven trade. The SNB’s rate differential continues to weigh.

Asian Session Setup

Tokyo opens with USD/JPY at 157.16 and every yen cross down 2%+. The question for the Asian session is whether this was a one-day carry liquidation or the start of a broader unwind. Japanese institutional flows at the Tokyo fix will set the tone — if real-money accounts use the dip to add long USD/JPY, the pair stabilises. If they stand aside, 155 comes into view.

AUD/USD at 0.7001 is sitting right on the 0.70 handle, a level that has acted as a magnet for the past month. Copper’s strength gives the Aussie a floor, but if yen strength persists into Sydney, AUD/JPY selling can drag AUD/USD below 0.70 regardless. DXY pinned below 100 is marginally supportive for AP FX, but tonight the yen is driving the bus, not the dollar.

Bottom Line

This was a yen session, full stop — carry unwinds and a crude oil crash created the sharpest JPY bid in weeks while the rest of G10 barely moved. USD/JPY at 157.16 is the pair every Asia-hours desk is watching, and the speed of the drop means the Tokyo fix reaction will determine whether this is a flush or the start of something larger.

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