USD/JPY remains capped around 157.00 after a modest rebound, with markets awaiting the US Nonfarm Payrolls (NFP) release.

USD/JPY is trading in a subdued manner near 157.00 during Friday’s Asian session, extending its overnight recovery in line with the US Dollar’s rebound. However, gains remain limited as markets stay cautious about the risk of Japanese FX intervention. Investors are also holding back ahead of the US April employment report due later in the day.

USD/JPY Technical Analysis Overview

On the 15-minute chart, USD/JPY is trading around 159.62, staying above the session open at 159.36. This keeps a slight intraday bullish tone intact as price continues to edge higher within a narrow consolidation range. The Stochastic RSI is positioned near the mid-50s, indicating improving upward momentum without entering overbought territory, which suggests buyers still retain short-term control.

Immediate support is located at 159.36, the day’s open. A break below this level could trigger a deeper pullback toward earlier intraday lows. Although no major moving averages are active on this timeframe, the pattern of higher closes continues to favor buying on dips as long as the pair holds above 159.36.

On the daily chart, USD/JPY also trades at 159.62 and maintains a constructive bullish outlook. Price remains firmly above the 50-day EMA at 158.44 and the 200-day EMA at 155.10, preserving the broader uptrend structure. The Stochastic RSI has recovered toward mid-range levels, reflecting renewed upside momentum after a phase of consolidation within the ongoing bullish trend.

Key support is seen at the 50-day EMA around 158.44, where a pullback would still be consistent with the broader uptrend as long as the 200-day EMA at 155.10 holds. A daily close below the 50-day EMA would signal a potential shift toward a deeper correction, while sustained trading above current levels keeps the bullish structure intact and leaves room for another attempt at recent highs.

Fundamental Analysis Overview

Recent comments follow a series of warnings from Japan’s Ministry of Finance. Finance Minister Satsuki Katayama reiterated last week that authorities are prepared to act against excessive speculative movements in the yen. This stance has kept markets alert after recent sharp swings in USD/JPY, which many participants interpret as possible signs of official intervention.

At the same time, the Bank of Japan’s (BoJ) March meeting minutes, released on Thursday, revealed that several policymakers see room for further interest rate hikes if the energy shock from the US-Iran conflict persists and leads to broader inflationary pressures. Some members also suggested that Japan may need to gradually move away from deeply negative real interest rates.

This increasingly hawkish tone from the BoJ has strengthened expectations for a potential rate increase as early as June. However, analysts remain cautious, noting that sustained support for the yen would likely require either lower US Treasury yields or easing oil prices in addition to tighter domestic policy.

Strategists at OCBC, including Sim Moh Siong and Christopher Wong, suggest that recent USD/JPY fluctuations resemble intervention activity, with the perceived intervention threshold now around 158 rather than 160. They also note that further action could drive the pair toward the 150–155 range, though they emphasize that intervention alone may not be sufficient to change the broader trend without a stronger shift in BoJ policy.

In the US, attention is shifting to Friday’s April employment data. Forecasts point to around 60,000 new Nonfarm Payrolls, with unemployment expected to remain steady at 4.3%. Weekly Initial Jobless Claims, due earlier on Thursday, will also be closely monitored for additional labor market signals.

Meanwhile, the US Dollar Index (DXY) remains under pressure, hovering near two-month lows around 97.90. Markets continue to anticipate a more dovish Federal Reserve outlook, which is limiting the dollar’s upside potential against the yen.