The Japanese yen (JPY) fluctuated in a narrow range against its U.S. counterpart during the Asian session on Friday and consolidated the previous day’s big losses to a new low since the beginning of the year. Bank of Japan (BoJ) Deputy Governor Shin’ichi Uchida said on Thursday that aggressive policy tightening is unlikely even after the exit from negative interest rate policy. This, along with the recent bullishness in stock markets, continues to support the safe-haven Yen. The US Dollar (USD), on the other hand, stands near its highest level in nearly three months reached earlier this week and is another factor supporting the USD/JPY pair.

Nevertheless, uncertainty over the path of the Federal Reserve (Fed) rate cut is keeping USD bulls away from aggressive betting. In addition, expectations that large Japanese companies may offer significant wage increases this year will support steady and stable inflation, which will allow the Bank of Japan to move away from ultra-confident monetary policy settings, and help limit yen losses. Traders may also prefer to wait for next week’s release of the latest US consumer inflation data for information on the Fed’s future policy decisions, which will play a key role in influencing the USD price dynamics in the near future and determining the next stage of USD/JPY directional movement.

Recommendations: Trade Sell orders from the current price level