Key events today:

05.09.25 12:30 UTC: USD – Change in non-farm payrolls / Unemployment rate.

The Japanese yen (JPY) strengthened against the US dollar during the Asian session on Friday amid positive domestic data showing that real wages turned positive for the first time in seven months.

Moreover, the rise in household spending in Japan in July, although slower than expected, supports market expectations that the Bank of Japan (BoJ) will continue its course toward policy normalization. This came after US President Donald Trump on Thursday signed an order to reduce tariffs on imports of Japanese cars, giving a slight boost to the yen.

Meanwhile, market participants remain divided on the likely timing and pace of the Bank of Japan’s rate hike. This, along with the generally positive risk sentiment, may act as a limiting factor for the yen, which is considered a safe-haven currency.

In addition, traders may wait for the release of the US non-farm payrolls (NFP) report to gain more insight into the Federal Reserve’s rate cut trajectory, which in turn will affect the US dollar (USD) and provide fresh momentum to the USD/JPY pair. Nevertheless, the fundamental background appears favorable for the yen and supports prospects for further appreciation.

Recommendations: BUY 148.20, SL 148.05, TP 149.20.