Traders await US Nonfarm Payrolls after the pair recovers from May lows amid Fed rate hike bets and weak JPY fundamentals.
The USD/JPY pair consolidates near 158.55 in Asian trading, pausing a weekly rebound from its lowest level since May. The move follows a joint US-Japan intervention and comes ahead of today’s US Nonfarm Payrolls report, which could drive fresh direction.
Persistent geopolitical risks, rising US inflation fears, and expectations of at least one Fed rate hike support the USD. Meanwhile, the JPY remains under pressure due to Japan’s worsening fiscal outlook and a seventh consecutive monthly decline in household spending, reducing odds of a Bank of Japan rate hike in September.
Technically, the pair hovers near the 38.2% Fibonacci retracement of its July drop from a four-decade high. The MACD signals improving short-term momentum, but the RSI near 50 reflects a neutral, range-bound market, discouraging aggressive bullish bets without a clear breakout.