Japanese Yen draws support from hot Tokyo CPI as USD bulls await US NFP report

The USD/JPY currency pair experienced a slight decline during the Asian trading session on Friday, falling below the 158.00 level while still near its weekly high from the previous day. This decline can be attributed to the acceleration of consumer inflation in Tokyo, Japan's capital, in September, as reported earlier. This positive data for the Japanese Yen (JPY) is supported by the Bank of Japan (BoJ) Summary of Opinions, which indicated that policymakers were considering the possibility of further rate hikes to counteract accommodative financial conditions.

Traders are cautious, as speculation of further JPY support from authorities may intervene, impacting the USD/JPY pair. Meanwhile, the US Dollar (USD) remains robust, supported by bullish sentiment, and is awaiting the release of the US Nonfarm Payrolls (NFP) report later in the North American session. The NFP data will significantly impact market expectations regarding the Federal Reserve's future policy direction, thereby influencing the USD and providing additional support to the USD/JPY pair.

Notably, the USD/JPY pair is currently above the 100-period Simple Moving Average (SMA) on the 4-hour chart, indicating a positive near-term outlook. A break below the 156.52 level could weaken the bullish structure and expose deeper retracements. Conversely, bulls may be waiting for the USD to surpass the 159.00 mark before taking positions to capitalize on an anticipated extension of the three-week-old uptrend.