Japanese Yen consolidates near August highs vs USD as hawkish BoJ, Fed bets clash
The USD/JPY pair struggles to capitalize on Friday's modest bounce from the vicinity of early August lows and kicks off the new week on a softer note. Spot prices currently trade just below the 156.00 mark, though the downside remains cushioned amid mixed fundamental cues.
The USD/JPY currency pair is struggling to gain momentum as it starts the new week near the 156.00 level. The Japanese Yen is supported by expectations of a 25 basis point rate hike from the Bank of Japan (BoJ) at their upcoming meeting on September 17-18, as well as speculation of a possible follow-up rate hike in December. Meanwhile, the US Dollar is facing headwinds due to weaker-than-expected US Nonfarm Payrolls (NFP) report, which may delay further rate hikes by the Federal Reserve (Fed).
However, rising concerns over US-Iran tensions and the ongoing dispute in the Strait of Hormuz provide support for the US Dollar as a safe-haven currency, potentially limiting the downside for the USD/JPY pair. Traders are advised to wait for confirmation of further selling below the 155.30-155.20 support level before considering additional downside exposure.
The USD/JPY pair is currently trading below its 200-day Simple Moving Average (158.46) and may face continued pressure if this technical barrier is breached.
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