Dollar Rebounds Against Yen Ahead of US Jobs Data
The US dollar rebounded against the yen on Friday as traders adjusted their positions ahead of the release of US Nonfarm Payrolls data. The USD/JPY pair rose towards the 156.50 area, interrupting a two-day losing streak.
Market participants scaled back expectations for a Federal Reserve rate increase in September after Fed Governor Christopher Waller expressed optimism that inflation has begun to show signs of cooling.
The reduced expectations and softer US bond yields limited the dollar's upside, while market pricing for a 25 basis point Bank of Japan hike in September continued to support the yen.
From a technical perspective, USD/JPY is trading below a cap near the 23.6% Fibonacci retracement of its sharp weekly decline, and analysts note that a decisive break below the primary structural support in the 155.30-155.20 band would be required to clear the way for deeper losses.