USDJPY encounters new supply, but there is no follow-through.

After the previous day’s small gain, the USDJPY pair faces further selling pressure and falls closer to the 148.00 mark during the Asian session on Thursday. This is the second day in a row that spot prices have fallen, but they have recovered a few pips in the last hour and remain above the lowest level since September 14 seen on Tuesday.

A confluence of events supports the USDJPY while putting pressure on the major.

The market attributes the drop toGotobi refers to the Japanese habit of paying certain payments on specified days of the month that conclude in a “5” or “0” (such as the 5th, 10th, 15th, 20th, 25th, and 30th). Furthermore, rumors that Japanese authorities may have intervened in the FX market, particularly when the Japanese Yen (JPY) fell below the crucial level of 150.00 versus the US dollar earlier this week, prompts some long-unwinding.

Reduced expectations for future Fed rate rises pull the USD away from its YTD high.

The US Dollar (USD), on the other hand, extends the overnight slide from a nearly 11-month high reached on Tuesday, adding to the negative pressure on the USDJPY pair. The publication of the US ADP data on Wednesday was disappointing, as was the decrease in US services. , provides the Federal Reserve (Fed) with an incentive to refrain from rising interest rates. This causes additional declines in US Treasury bond rates and weakens the USD.

Nonetheless, recent statements by numerous Fed officials bolstered the argument for more policy tightening to return inflation to the 2% objective. Furthermore, markets have priced in at least one more rate hike by the end of the year and are certain that the Fed will keep rates higher for longer. This should operate as a tailwind for US bond rates and the Greenback, therefore be cautious before initiating strong negative bets on the USDJPY pair.

Investors may also decide to remain on the sidelines for the time being.

On Friday, the much regarded US monthly employment figures, known colloquially as the NFP report, will be released. Meanwhile, traders will draw cues from the release of the typical Weekly Initial Jobless Claims data from the United States on Thursday. Aside from that, US bond yields may impact USD price dynamics and generate short-term trading opportunities in the USDJPY pair.