USD/JPY near August highs ahead of US NFP report
The USD/JPY pair is trading near its August highs as the US dollar remains on the back foot ahead of the closely watched US Nonfarm Payrolls (NFP) report. The pair is currently at the 155.75 region, nearly unchanged for the day.
Traders are eagerly awaiting the release of the NFP data, which will provide clues about the Federal Reserve's future policy path and its impact on interest rates. A dovish outcome could lead to a decline in US bond yields, further weighing on the dollar.
The Japanese Yen has been gaining support from hawkish repricing of Bank of Japan rate hike bets, with traders now fully pricing in a 25 basis point rate hike at the September 17-18 BoJ meeting and a follow-up move in December. This sentiment is fueled by comments from BoJ board member Hajime Takata.
The technical analysis suggests that if the pair breaks below the August swing low near 155.25-155.20, it could trigger a fresh wave of bearish traders, leading to further weakness below the 155.00 psychological mark.