USD/JPY: Solid jobs report, reduced expectations of Fed cut, BOJ pivot, underpinning pair

A couple of items from Friday to take note of for USD/JPY traders.

1. Expectations of Federal Open Market Committee (FOMC) rate cuts have been pared back due to the solid jobs report as well as the Wall Street Journal Fed ‘insider’ report:

• Forexlive Americas FX news wrap: A surprise fall in the US unemployment rate lifts dollar
• Timiraos: Fed unlikley to talk about rate cuts and perhaps may not for several months

2. Expectations of a tightening in policy from the Bank of Japan have also been watered down, Justing posted on a report discussing 3 reasons that expecting an imminent pivot from the BOJ is misplaced:

• No intention from Ueda to hint at timing of policy change – report

Add those two together and you have a recipe to underpin USD/JPY in the session and sessions ahead.

This article was written by Eamonn Sheridan at www.forexlive.com. Source