USD/JPY seesaws near 130.00 as Yen traders await Fed, US NFP amid hawkish BoJ bias

BoJ’s sustained defense of YCC contrasts with talks surrounding Fed’s pivot to keep bears hopeful.China’s return from holidays, US employment numbers also eyed for clear directions.

USD/JPY remains on the back foot around 129.90, despite recently bouncing off the intraday low, as the traders in Tokyo begin the key week with mixed feelings. In doing so, the Yen pair challenges the previous two-week uptrend amid sluggish yields, cautious optimism in the market.of higher festive spending and the dragon nation’s readiness to boost consumption. On the same line could be the hopes of the Federal Reserve’s dovish hike after the last week’s mixed data.

On Friday, the Federal Reserve's preferred gauge of inflation, namely the Core Personal Consumption Expenditures Price Index, matched 4.4% YoY market forecast versus 4.7% prior while the monthly figure rose to 0.3% versus 0.2% expected and previous readings. Ahead of that, the US Bureau of Economic Analysis' first estimate of the US fourth quarter Gross Domestic Product marked an annualized growth rate of 2.9% versus 2.6% expected and 3.2% prior.

Against this backdrop, the US 10-year Treasury yields remain lackluster near 3.51% after snapping a two-week downtrend whereas the S&P 500 Futures print mild losses.may restrict immediate USD/JPY moves but China’s return from holidays could entertain momentum traders. It’s worth observing that the latest market favor for the US Dollar and the Treasury bond yields may help the Yen pair in extending the previous two-week uptrend.

Above all, this week’s Federal Reserve decision and the US employment data for January will be crucial for the market players to watch for clear directions.Although the 21-DMA and a two-week-old ascending support line restrict short-term USD/JPY moves between 130.30 and 129.30 in that order, bullish MACD signals and recently firmer RSI suggests that the buyers are flexing muscles for entry.

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