USDJPY consolidates near the 148.00 level and awaiting the US NFP report for new impetus

The USDJPY pair extended its sideways consolidation for a second consecutive day on Friday and stayed restricted inside a tight range until the start of the European session. Traders are anticipating the release of the closely-watched US monthly jobs data (NFP) for a fresh push as the pair is now trading near the 148.00 round-figure mark.

A small US Dollar slide from Thursday's nearly two-week high serves as a drag for the USDJPY pair in the interim. Aside from this, reports that the Japanese government may intervene again to avoid a severe collapse in the yen further limit the upside potential for spot prices, at least for the time being. However, a major divergence between the Federal Reserve and the Bank of Japan's (BoJ) monetary policy views may continue to provide support and contain any serious collapse.

In actuality, Fed Chair Jerome Powell crushed hopes for a dovish reversal on Wednesday when he declared that it was too early to talk a stop in the rate-hiking cycle. Powell noted that the terminal rate will remain above forecasts, which continues to sustain the stratospheric rates on US Treasury bonds. In contrast, the BoJ has shown no desire to hike interest rates and has confirmed that it will continue to maintain the return on 10-year bonds at 0%. This in turn supports USDJPY bulls and enhances the chance of additional gains.

However, traders were wary to make aggressive wagers previous to the release of important US macroeconomic data. Along with US bond rates, the well-known NFP report will have a substantial impact on USD price dynamics and create possibilities for short-term trading in the USDJPY pair. Despite this, the fundamental environment implies that the path of least resistance for spot prices is to the downside, and any dip is more likely to be bought.