Nikkei Slips, Oil Climbs on Houthi Attacks and US Yields Hold Above 5.3% as Asia Braces for FOMC Minutes
Asian markets trade softer Wednesday despite record closes on Wall Street, with the S&P 500 at 7,818.93 (+0.58%) and the Nasdaq at 27,599.79 (+0.45%). The Nikkei is about 70,080 (-0.86%), MSCI Asia ex-Japan is down 0.3% and mainland China is shut for Golden Week. WTI is $90.38 and Brent $101.65 after Houthi strikes on Saudi Arabia, the 10-year Treasury yield sits near 5.31% and the dollar index is about 101.9–102.0. USD/JPY firms at 158.43 while AUD/USD stalls at 0.6972, and the RBI has hiked to 5.50%. The 10-year auction and the 18:00 GMT FOMC minutes are the next tests.
Market at a Glance
| Instrument | Price | Change | Note |
|---|---|---|---|
| USD/JPY | 158.43 | +0.19% | Near a 1.5-week high — BoJ October hike odds cut to about 12% — Tokyo intervention risk looms near 160 |
| AUD/USD | 0.6972 | -0.14% | Snapped a three-day winning run — RBA November hike odds sank to about 20% — firm dollar ahead of FOMC minutes |
| Aluminium | $3,137.50 | +0.39% | Up 14% on the year but off 5% in a month — firm dollar weighs, Gulf smelter and shipping risks keep a bid |
| Corn (Dec) | 497.25¢ | -0.10% | Hugging a 5-week low — September 1 stocks of 2.095bn bushels, 35% above last year — harvest pressure building |
| Nikkei 225 | 70,080 | -0.86% | Gave back part of Tuesday’s 1.05% gain to a three-month high of 70,684 — TOPIX down about 0.5% |
| Solana | $117.88 | -2.07% | Dipped under $120 as BTC lost $85,000 — 24-hour range $117.22–$121.99 |
| BNB | $779 | -1.10% | Trading in a $778–789 range after a failed push toward $800 — BTC at $84,022 |
What Is Driving the Session
Oil jumps on Houthi attacks and a Gulf storm
WTI is back above $90 and Brent is at $101.65 as Houthi strikes on Saudi Arabia and a storm bound for US producing areas outweigh recovering Gulf exports. Vitol estimates about 12 million bpd of crude has left the region over 7–10 days, but higher oil is raising inflation and yield worries. That feeds directly into yields and hits Asian importers such as Japan.
The Nikkei slips despite Wall Street records
The Nikkei gave back part of Tuesday’s gain to a three-month high of 70,684 as oil and 5.3% US yields weighed on sentiment. Mainland China is closed for Golden Week and reopens Thursday 8 October, which can move the Nikkei, AUD and aluminium. Traders cut October Fed hike odds to about 19% from 50% a week ago after soft jobs and PCE data, yet Fed’s Schmid said more tightening is needed. The 10-year near 5.3% and a dollar index near 102 stay supportive of the greenback.
The Yen softens as BoJ hike bets recede, and policy diverges across Asia
USD/JPY holds near a 1.5-week high as Ueda’s cautious tone cut October hike odds to about 12% and US yields climbed again. Rabobank notes markets fear intervention close to 160, and Japan reportedly checked rates on 18 September. The RBI hiked 25bps to 5.50%, the BoJ looks set to pause in October, and the RBA is seen on hold in November at about 20% odds. That backdrop favours USD/JPY over AUD/USD.
Commodities and crypto lean on the dollar
Aluminium is down 5% in a month while corn trades near five-week lows on large US stocks, with funds trimming longs. Bitcoin lost $85,000 (now $84,022) and Ethereum $2,619, dragging Solana and BNB lower. The Solana Foundation’s DvP settlement launch with J.P. Morgan input is the supportive headline for SOL.
Trade Setups
All levels are conditional technical references for educational discussion only. They are not forecasts and do not constitute personal investment advice. Tonight’s FOMC minutes can reverse any of these positions sharply.
USD/JPY — 158.43 (+0.19%)
Stance: Bullish above 158.00 — 159.55 is the hurdle
Levels
- Support: 158.00 / 156.90
- Resistance: 159.55 / 160.00
- Pivot: 158.38
Thesis
USD/JPY sits above the 158.38 pivot with RSI near 56, capped by the 100-day SMA at 159.55 and the upper Bollinger Band near 159.80. Rabobank notes markets fear intervention close to 160. Holding 158.00 keeps 159.55 in view.
Exit if
- Price slips under 158.00, pointing to the 156.90 mid-band.
- Intervention risk materialises near 160.
- BoJ hike expectations rebuild ahead of the 30 October meeting.
AUD/USD — 0.6972 (-0.14%)
Stance: Bearish below 0.7000 — 0.6985 is strong resistance
Levels
- Support: 0.6895 / 0.6866
- Resistance: 0.7000 / 0.7055
Thesis
The pair is below its 100-day SMA near 0.7055 with RSI around 37, after four weekly declines. UOB flags 0.6985 as strong resistance and 0.6866 as the next major support. With RBA hike odds near 20%, the Aussie leans on the dollar and yields.
Exit if
- A clean break above 0.6985 fades the bearish case.
- A softer dollar follows the FOMC minutes.
- RBA hike odds rebuild from about 20%.
Aluminium (LME) — $3,137.50 (+0.39%)
Stance: Range-bound under 3,223 — support at 3,100
Levels
- Support: 3,100 / 3,000
- Resistance: 3,223 / 3,300
Thesis
Aluminium is 14% higher over a year but has fallen about 5% in a month, with LME 3-month near 3,100 last week. Tacto’s base case is 3,100–3,400 over four to six weeks, with a 3,400–3,700 risk case if Gulf smelting or logistics are hit.
Exit if
- A close above 3,223 reopens 3,300.
- A break under 3,100 targets 3,000.
- Gulf smelting or logistics disruption triggers the 3,400–3,700 risk case.
Corn (Dec CBOT) — 497.25¢ (-0.10%)
Stance: Bearish below $5.00 — support at $4.95, then $4.88
Levels
- Support: $4.95 / $4.88
- Resistance: $5.00 / $5.075
Thesis
Dec corn settled $4.9725 on 5 October (latest confirmed), down 30.5 cents last week after the USDA stocks surprise. It holds the 4.95 low, with the 50-day average near 5.075. Fund longs fell to about 378k contracts and a strong dollar adds a headwind.
Exit if
- Price breaks above $5.00 and moves toward the 50-day average near $5.075.
- Price loses $4.95, exposing $4.88.
- The dollar weakens and fund selling eases.
Nikkei 225 — 70,080 (-0.86%)
Stance: Bullish while above 70,000 — 70,700 is the first hurdle
Levels
- Support: 70,000 / 69,000
- Resistance: 70,700 / 72,000
Thesis
Tokyo trades just above 70,000 after Tuesday’s 70,684 close, the highest in three months, with the 52-week high at 72,832. FXStreet’s Kshitij sees 72,000 while price holds 70,000. Rising oil and 5.3% US yields are the drag.
Exit if
- A break under 70,000 opens 69,000.
- Oil and US yields keep rising.
- A close back over 70,700 would instead revive the push toward 72,000.
Solana (SOL/USD) — $117.88 (-2.07%)
Stance: Bearish below 118.22 — 120.51 is resistance
Levels
- Support: $117.22 / $115.00
- Resistance: $118.22 / $120.51
Thesis
SOL is under its short-term averages after slipping through 118.22 support, with the 24-hour range at 117.22–121.99. Solana ETF net inflows have cooled to about $2.4M weekly, though the DvP settlement launch with J.P. Morgan input is supportive.
Exit if
- A reclaim of 120.51 (Ichimoku Kijun) eases pressure.
- A loss of 117.22 exposes 115.
- Bitcoin extends its slide below $84,022.
BNB (BNB/USD) — $779.06 (-1.10%)
Stance: Neutral-bullish above 760 — 800 is the hurdle
Levels
- Support: $760 / $740
- Resistance: $789 / $800
Thesis
BNB is up about 2.5% on the week but rejected near $800 and trades in a $778–789 band. A breakout over $800 targets roughly $930 on TradingView ideas, while failure keeps it range-bound. Feeds differ by exchange.
Exit if
- Price fails at $800 again and stays range-bound.
- Price loses $760, with the 7 September close of $740 next.
- The wider crypto tape keeps correcting.
What to Watch — Rest of the Day and This Week
| Time | Event | Note |
|---|---|---|
| Today (done) | India RBI rate decision | Repo raised 25bps to 5.50%; stance shifted to calibrated tightening |
| Today | US 10-year Treasury auction | Demand test with yields at 24-year highs |
| Today 18:00 GMT | US FOMC minutes (15–16 Sep) | Tests tightening guidance; October hike odds are about 19–22% |
| Ongoing | Gulf oil and the Houthi-Saudi front | A storm heading for US producing regions and further strikes keep WTI above $90 |
| Thu 8 Oct | US 30-year auction; jobless claims | Long-end demand and labour follow-up |
| Thu 8 Oct | China: Shanghai reopens after holiday | Mainland China closed today (Golden Week); can move AUD, aluminium and the Nikkei |
| Fri 9 Oct | US UMich sentiment (prelim.); CFTC positioning | Inflation expectations; speculative positioning |
| 27–28 Oct | US FOMC meeting | Hold priced about 78% |
| 30 Oct | Japan BoJ policy meeting | Hike odds about 12%; about 90% by December |
Analyst View — Rest of Session and Into the Next
The Asian session is cautious. A firm dollar, oil above $90 and 24-year-high US yields explain why Tokyo is slipping even after record closes on Wall Street. The 10-year auction and the 18:00 GMT FOMC minutes are the next tests: a weak auction or hawkish minutes would lift the dollar, with USD/JPY toward 159.55, AUD/USD under 0.6895, and pressure on crypto and gold.
Policy divergence across Asia is the clearest theme. The BoJ looks set to pause and the RBA is seen on hold, which favours USD/JPY over AUD/USD, while Tokyo intervention risk rises near 160 ahead of the 30 October BoJ meeting. Gulf headlines keep oil as the swing factor: continued strikes feed yields and hit Asian importers like Japan, while easing flows would reverse the move.
In commodities and crypto, aluminium and corn remain pressured by the dollar and supply, and Solana and BNB are following Bitcoin’s slide below $85,000. Shanghai’s reopening on 8 October can move AUD, aluminium and the Nikkei. Treat every level above as conditional, and size positions for fast-moving auction, FOMC and Gulf headlines.
Read the full report: capitalstreetfx.com/market-analysis/oil-tops-as-us-yields-stay-high-ahead-of-fomc-minutes-7-oct