Japanese Yen retreats from weekly high as USD steadies ahead of US NFP report

The Japanese yen pulled back from its weekly high while the US dollar stabilized ahead of the upcoming Nonfarm Payrolls report, according to FXStreet. The move reflects a transmission through the rate differential channel: with the Federal Reserve's policy path viewed as more restrictive than the Bank of Japan's, dollar-yen tends to be sensitive to shifts in expectations for US labor market strength and the resulting repricing of US Treasury yields. The USD and JPY pairing is the most directly exposed, with the yen's recent gains vulnerable to reversal if traders reduce bets on a near-term Fed easing cycle. Traders will focus on the NFP headline payroll figure and average hourly earnings, since a hot wage reading would likely lift US yields and extend dollar strength against the yen, while a soft print could revive yen buying.

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