USD Rebounds Ahead of NFP as Yen Retreats from August Highs
The Japanese Yen retreated from its August highs as the US Dollar rebounded ahead of the crucial US Nonfarm Payrolls (NFP) report. The USD/JPY pair staged a modest intraday recovery, climbing back to the 156.50 area during the Asian session on Friday.
Some buyers were attracted to the US Dollar amid some repositioning trade before the NFP data, which prompted short-covering around the USD/JPY pair. Traders pared their bets for a rate hike in September after Fed Governor Christopher Waller offered optimism that inflation is slowing and backed keeping policy unchanged.
This led investors to push US bond yields lower, potentially capping any meaningful upside for the buck and the USD/JPY pair. Meanwhile, hawkish repricing of Bank of Japan (BoJ) rate hike expectations, along with suspected intervention, might continue to underpin the Japanese Yen.