• USD/JPY regains traction on Friday and was supported by a combination of factors.
  • The Fed-BoJ policy divergence and a positive risk tone undermines the safe-haven JPY.
  • A modest USD uptick remains supportive, though bulls seem reluctant ahead of the NFP.

The USD/JPY pair attracts some buying near the mid-132.00s on Friday and reverses a part of the previous day's decline. The pair maintains its bid tone through the early European session and is currently trading around the 133.25 region, just a few pips below the daily high.

A big divergence in the monetary policy stance adopted by the Federal Reserve and the Bank of Japan, along with a positive risk tone, weighs on the safe-haven Japanese yen. Apart from this, a modest pickup in the US dollar demand turns out to be a key factor lending support to the USD/JPY pair.

It is worth recalling that the BoJ has repeatedly reiterated it will stick to its ultra-easy policy settings and its commitment to keep the 10-year Japanese government bond yield around 0%. In contrast, several Fed officials hinted this week that more interest rates are coming in the near term.

Investors, however, have been pushing back against the idea of a larger rate hike at the September FOMC meeting. This, along with the recent fall in the US Treasury bond yields, is holding back the USD bulls from placing aggressive bets and keeping a lid on any meaningful gains for the USD/JPY pair.

Traders also seem reluctant and prefer to move to the sidelines ahead of the closely-watched US monthly jobs data, due later during the early North American session. The popularly known NFP report will influence the USD price dynamics and provide a fresh directional impetus to the USD/JPY pair.

Technical levels to watch

USD/JPY

Overview
Today last price 133.15
Today Daily Change 0.24
Today Daily Change % 0.18
Today daily open 132.91
 
Trends
Daily SMA20 136.12
Daily SMA50 134.71
Daily SMA100 130.56
Daily SMA200 122.65
 
Levels
Previous Daily High 134.42
Previous Daily Low 132.76
Previous Weekly High 137.46
Previous Weekly Low 132.5
Previous Monthly High 139.39
Previous Monthly Low 132.5
Daily Fibonacci 38.2% 133.4
Daily Fibonacci 61.8% 133.79
Daily Pivot Point S1 132.31
Daily Pivot Point S2 131.71
Daily Pivot Point S3 130.65
Daily Pivot Point R1 133.97
Daily Pivot Point R2 135.02
Daily Pivot Point R3 135.63

 

 

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