- USD / JPY is moving in range during the first half of trading action on Friday.
- The bullish US data on Thursday continues to support the USD and offers some support for the pair.
- Nervousness ahead of the NFP benefits the safe-haven JPY and limits any significant rally in the pair.
The pair USD/JPY it lacks a firm directional bias and moves between tepid gains and minor losses during the European session on Friday. At the time of writing, the pair remains around the 110.20 region, just below the two-month highs set earlier in the day.
Following the strong positive move the day before, the pair now appears to have entered a bullish consolidation phase amid some jitters ahead of employment data US monthly reports The NFP report will be one of the most important economic data to set the tone for the next FOMC meeting later this month. This, in turn, has limited recent optimism, which has offered some support to the safe-haven Japanese yen and limited the rise in the USD / JPY pair.
Having said that, concerns that an extension of the state of emergency in Tokyo and eight other prefectures could hamper Japan’s fragile economic recovery have acted as a headwind for the JPY. This, coupled with a modest strength in the US dollar, has helped limit the decline in the USD / JPY pair. The USD has remained supported by upbeat US macro data on Thursday., which indicated that the US recovery is accelerating and has fueled speculation that the Fed could advance the schedule to reduce its bond purchases.
The fundamental backdrop supports the prospects for additional gains in the pair. The constructive perspective is reinforced by the fact that USD / JPY has found acceptance above the key psychological level of 110.00. However, the bulls could still wait for some solid continuation buying before positioning for any further upside, possibly towards the yearly highs around the 110.95 region touched in March.
USD / JPY technical levels
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