Key events for today:

06.03 13:30 UTC: USD – Change in Nonfarm Payrolls.

USD/JPY is holding around 157.50 and retains an upside bias as the dollar continues to draw support from safe-haven demand. Escalation of the conflict in the Middle East has lifted oil prices, which is particularly unfavorable for Japan as the country remains a major energy importer. At the same time, the market has become more cautious about how much the U.S. rate will be cut in the future, which also supports the dollar.

There is also a restraining factor for the pair, and it is linked to Japan. According to economists’ surveys, the market expects the Bank of Japan to raise rates further by the end of June, and officials have signaled that the March and April meetings will be important for assessing data on prices and wages. This supports the yen and limits the pace of USD/JPY’s rise, but it does not yet change the overall balance of forces.

As a result, the market is caught between two themes: expectations of a more hawkish Bank of Japan and the dollar’s current advantage amid expensive oil and elevated investor caution. For now, the second theme looks stronger. If external tensions do not ease, the baseline scenario for today remains a moderate push higher in USD/JPY, with a preference for buying from current levels.

Recommendation: BUY 157.50, SL 157.20, TP 158.40