USD/JPY is stuck in a range around mid-128,000 waiting US-NFP

The USD/JPY pair oscillates in a constrained range on Friday as it fails to build on the previous day's small recovery from close to the two-week low of 128.00. Spot prices remain stable above mid-128.00s throughout the early European session, oscillating between tepid gains and slight losses.

The US Dollar is seen operating as a tailwind for the USD/JPY pair as it moves higher on the final day of the week and aims to build on its rebound from a nine-month low set on Thursday. The US dollar's increase may be linked to some repositioning trading before the release of the much anticipated US monthly jobs report later in the early North American session. The underlying resilience in the labor market was highlighted by the US Weekly Initial Jobless Claims data issued on Thursday, which raised hopes for robust Nonfarm Payrolls (NFP). As a result, investors were obliged to reassess their predictions for future rate increases by the Fed, which helped to sustain the USD. However, lower US Treasury bond yields limit the amount of profit.

The Bank of Japan (BoJ), on the other hand, is expected to adopt a more hawkish position later this year, which is expected to bolster the Japanese Yen. The Nationwide Core Inflation Rate for Japan, which recorded its highest annualized reading since December 1981, helped to increase the bets. This is considered to be another element that, at least temporarily, restrains the USD/JPY pair.
In the wake of the overnight breach below a symmetrical triangle and before of the important US macro data, bullish traders also appear cautious to place new bets. However, it appears that the USD/JPY pair will experience losses for the first time in three weeks.

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