The currency pair remains rangebound amid mixed signals from US rate expectations and Japan’s wage growth data.
The USD/JPY pair traded marginally lower in early Asian hours Wednesday, retreating from this week’s recovery above 157.50 but holding near mid-157.00s, down less than 0.10%. The slight dip follows Japan’s sixth consecutive month of real wage growth in June, alongside hawkish Bank of Japan minutes, which provided modest support to the yen.
Oil prices near multi-week lows and hopes for a US-Iran deal have eased inflation concerns, reducing expectations for Federal Reserve rate hikes. However, Japan’s fiscal concerns and the persistent US-Japan rate gap limit yen strength. Traders also await Friday’s US Nonfarm Payrolls report, adding caution to positioning.
Technically, the pair remains slightly bearish below the 50-period EMA on the 4-hour chart, with the RSI near neutral and MACD slipping below zero.