Yen Holds Near August Highs as US NFP Report Looms

The Japanese yen remains near its August highs as traders await the release of the US Nonfarm Payrolls (NFP) report. The USD/JPY pair is trading at around 155.75, nearly unchanged for the day, and has been in a bearish consolidation phase during the Asian session.

Traders are looking to the NFP report for cues about the Federal Reserve's future policy path, which will influence the near-term US Dollar price dynamics and the USD/JPY pair. Fed Governor Christopher Waller offered optimism that inflation is slowing, leaving the door open for keeping policy unchanged at the upcoming FOMC meeting.

The Japanese yen continues to draw support from a more hawkish repricing of the Bank of Japan rate hike bets, capping the USD/JPY pair. Traders have fully priced in a 25 basis point rate hike at the September 17-18 BoJ meeting and the possibility of a follow-up move in December.

Technical analysis suggests that weakness below the August swing low near 155.25-155.20 would be seen as a fresh trigger for bearish traders, potentially leading to further weakening below the 155.00 psychological mark.