USD/JPY faces resistance near 147.70 amid a softened USD and hawkish comments from the Bank of Japan (BoJ). BoJ policymakers suggest that the economy is progressing toward its 2% target, increasing the likelihood of the BoJ ending its negative interest rates.
The upcoming US Nonfarm Payrolls report is eagerly anticipated by traders.
During the early Asian trading hours on Friday, the USD/JPY pair falls to fresh five-week lows below the 148.00 mark.
The weakening US Dollar and growing speculation about the BoJ moving away from an ultra-loose monetary policy contribute to selling pressure on the USD/JPY. Currently, the pair is trading at 147.70, marking a 0.26% decline for the day.
Governor and board members of the Bank of Japan conveyed on Thursday that the economy is heading towards the central bank's 2% inflation target.
This suggests the possibility of the BoJ ending its negative interest rates for the first time since 2007. The hawkish comments propel the JPY to a one-month high against the USD.
Contrastingly, Fed Chair Jerome Powell stated that the US central bank is approaching a point where it has sufficient confidence in reaching the 2% inflation target to consider lowering interest rates.
However, Powell did not specify a precise timetable for rate cuts, emphasizing the need for more evidence.
Market participants are eagerly awaiting the US February labor market report, particularly the Nonfarm Payrolls data, on Friday. Projections indicate an addition of 200,000 jobs to the US economy, with the unemployment rate expected to remain at 3.7%. Average Hourly Earnings are forecasted to ease to 0.2% MoM compared to 0.6% MoM in January.
Paraphrasing text from "Investing" all rights reserved by the original author.
