Key events today:

14:00 UTC: USD – University of Michigan Consumer Sentiment Index.

15:00 UTC: USD – FOMC Member Michelle Bowman Speech.

The Japanese yen (JPY) is weakening against its American counterpart during the Asian session on Friday, halting its recovery from the lowest level since July 30. Data released on Thursday showed that real wages in Japan declined in September, which, along with the cost of living issue, continues to negatively impact household spending and may weaken inflation prospects. This is expected to delay the Bank of Japan’s (BoJ) plans for further rate hikes amid domestic political uncertainty, which could undermine the yen.

Moreover, a generally positive tone towards risk is undermining the safe-haven yen, which, along with the emergence of dip buying in the US dollar (USD), is providing support to the USD/JPY pair. However, the recent yen weakness has prompted some verbal interventions from Japanese authorities. Additionally, the unwinding of “Trump trade” and the lack of hawkish signals from the Federal Reserve (Fed) act as obstacles to rising US Treasury yields, which may prevent JPY bears from making aggressive moves and limit the currency pair.

Recommendations: Monitor the 153.00 level; consider Buy positions if it consolidates above this level, and consider Sell positions on a rebound.