Investors await US nonfarm payrolls to gauge Fed policy direction, keeping the yen near weekly lows against the dollar.
The USD/JPY pair remains near mid-158.00s, holding gains from this week’s recovery after dipping to 155.25-155.20 in May. Traders are cautious ahead of the US nonfarm payrolls report, which could shape expectations for Federal Reserve rate moves and drive dollar demand.
Earlier this week, the pair rebounded from intervention-driven lows, supported by geopolitical tensions and rising oil prices. Persistent inflation risks and Fed rate hike bets have also bolstered the safe-haven dollar, offsetting weak Japanese spending data.
Oil prices climbed overnight after reports of potential attacks on Saudi Arabia and restrictions in the Strait of Hormuz. These developments add to market uncertainty, reinforcing the dollar’s strength as investors weigh geopolitical risks.