The BOJ got the ball rolling in USD/JPY this week but so far we're seeing the drop stall at the first key hurdle. The pair shook off the 150.00 mark on Wednesday before a fall below 148.00 yesterday. But we are seeing a slight pause in the decline amid a test of the 100-day moving average (red line). That level is seen at 147.70 currently.
With the US jobs report coming up, we're likely to see price action keep stuck around here in the meantime. As such, don't expect much fireworks in European trading later.
At the balance, the bias is still for a move lower in the pair at the moment. That considering traders are now sensing a hawkish shift by the BOJ and also the stronger bids in the bond market this week. 10-year Treasury yields are down further to 4.08% now, some 27 bps off its highs just two weeks ago.
The non-farm payrolls data will determine what comes next before the weekend. But at this stage, I'd be inclined to sell any pop higher in USD/JPY. That unless there are any major surprises in the data that would warrant a change in the Fed outlook - which I would label as unlikely.
