Japanese Yen Stays Soft as USD/JPY Hovers Near 144.00 Ahead of US NFP

Japanese Yen Stays Soft as USD/JPY Hovers Near 144.00 Ahead of US NFP

The Japanese Yen (JPY) continues to trade with moderate losses for the second straight session on Thursday, with the USD/JPY pair inching closer to the 144.00 mark during the early European session. The currency pair is largely influenced by global sentiment and key macroeconomic expectations.

Risk Appetite Improves After US-Vietnam Trade Deal

Markets saw a boost in risk-on sentiment following the announcement of a trade agreement between the United States and Vietnam, which eased concerns of prolonged trade conflicts. This shift has lowered demand for safe-haven assets like the JPY, contributing to the Yen’s intraday weakness.

Adding further downside pressure, former President Donald Trump reiterated the threat of imposing tariffs on Japan, criticizing Tokyo's refusal to import US-grown rice—another geopolitical layer affecting JPY sentiment.

BoJ Rate Hike Expectations Cap JPY Losses

Despite short-term bearishness, the Japanese Yen remains underpinned by expectations that the Bank of Japan (BoJ) may resume rate hikes as inflation spreads across Japan. This hawkish outlook contrasts with the dovish stance of the Federal Reserve (Fed) and may help limit the downside for the Yen.

Market Awaits US Nonfarm Payrolls Data

All eyes are now on the highly anticipated US Nonfarm Payrolls (NFP) report scheduled for later today. With the US Dollar (USD) staying weak due to expectations of Fed rate cuts, the release could trigger heightened volatility in the USD/JPY pair depending on the strength or weakness of the jobs report.