USD/JPY trades cautiously positive around 144.00 ahead of key US data
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USD/JPY trades cautiously higher around 144.00 ahead of the US NFP data for June.
Soft US labor market would accelerate Fed dovish bets for the July policy meeting.
BoJ Takata is hopeful that the central bank will resume monetary tightening gradually.
The USD/JPY pair edges higher to near 143.90 during European trading hours on Thursday. The pair trades cautiously higher as the US Dollar (USD) ticks up ahead of the United States (US) Nonfarm Payrolls (NFP) data for June, which will be published at 12:30 GMT.
The official employment data will significantly influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook as officials have cited growing labor market concerns lately and have supported interest rate cuts for addressing the same.
"The Fed should not wait for the job market to crash in order to cut rates," Fed Governor Christopher Waller said in an interview near the last week of June.
Economists expect US employers to have added 110K workers, fewer than 139K in May. The Unemployment Rate is estimated to have accelerated to 4.3% from the prior reading of 4.2%.
On the global front, investors are awaiting development in trade negotiations between Washington and its trading partners as the reciprocal tariff deadline of July 9 approaches. Meanwhile, the US has struck a trade agreement with Vietnam in which it has slashed additional tariffs to 20% from 40% announced earlier.
In Japan, Bank of Japan (BoJ) officials continue to keep the door open for more interest rate hikes. BoJ board member Hajime Takata stated earlier in the day that the central bank could resume the monetary tightening cycle steadily after scrutinizing the impact of tariffs by the US.
“My view is that the BoJ needs to support economic activity for the time being by maintaining its current accommodative monetary policy stance, Takata said and added, “At the same time, I believe BoJ should gradually and cautiously shift gears in its monetary policy.”
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