Crude oil prices have surged.
Amid the deteriorating situation in the Middle East, buying activity for near-term crude contracts has intensified, and it appears that available crude oil supplies are running low.
Brent crude remains above $100.

In response to this trend, U.S. long-term interest rates continue to rise.
Furthermore, President Trump’s statement—made following the Republican victory—that he would distribute a $5,000 “dividend” to every adult has prevented the rise in U.S. long-term interest rates from slowing.
The U.S. 10-year yield stands at 4.91 percent and the 30-year yield at 5.34 percent, both at recent highs.

Last week, the ECB decided to raise rates by 0.25%.
The market has begun pricing in another rate hike in December and a total increase of 0.75% by October 2027.
However, the euro-dollar pair is actually facing selling pressure.

The dollar-yen pair briefly reached around 154.65 yen on the back of rising crude oil prices, rising U.S. interest rates, and the PPI coming in at 5.4% year-over-year—exceeding the forecast of 5.3%.
While rising U.S. interest rates provide support for the USD/JPY pair, Japan’s 10-year yield is also approaching 3% again, so while the pair remains firm, it faces resistance above 154.50 yen.

All markets are moving in the opposite direction of what Mr. Bessent would like.
The USD/JPY pair appears to be a selling opportunity just short of 155 yen, but if “Bessent Magic” has faded, even selling on a half-hearted rebound could be risky.

If the U.S. raises rates and the Bank of Japan follows suit, the USD/JPY pair will likely struggle to move significantly.
In any case, we need to keep a close eye on crude oil prices.