The Japanese yen weakened against the U.S. dollar as traders adjusted positions ahead of the upcoming U.S. jobs report. Investors are watching closely, with expectations that the data could shape the Federal Reserve’s next moves on interest rates.
A strong Non-Farm Payrolls (NFP) report could push the dollar higher, reinforcing expectations that the Fed may keep rates elevated for longer. On the other hand, signs of a slowing labor market might fuel speculation about potential rate cuts, which could help the yen recover some ground.
The Bank of Japan’s stance remains a key factor holding the yen back. While there has been talk of an eventual shift away from its ultra-loose policy, the BOJ continues to lag behind the Fed, making the yen less attractive compared to the higher-yielding dollar.
Still, the yen often benefits from risk-off sentiment, meaning that any unexpected economic shocks or market volatility could drive renewed demand for the currency. For now, investors are waiting for the jobs data, knowing it could set the tone for the yen’s next move.
