USD/JPY Recovers from Recent Dip Following Mixed Central Bank Policies

The USD/JPY pair is showing signs of dip-buying as the week begins, pausing a three-day correction from its recent peak around 151.70, the highest since October 2022. It currently trades slightly above the mid-149.00s, up around 0.15% for the day. The US Dollar (USD) is making a modest recovery, supported by rising US Treasury bond yields, bouncing back from a six-week low after disappointing US jobs data.

The Bank of Japan's dovish stance and the prevailing risk-on sentiment are weighing on the Japanese Yen (JPY), benefiting the USD/JPY pair. The BoJ has made minor adjustments to its yield curve control policy, indicating a gradual move away from its long-standing accommodative monetary policy.

However, the Fed maintains a relatively hawkish outlook, leaving room for further US rate hikes. Investors expect the Fed to maintain its current stance in December, reinforced by softer-than-expected US employment data released on Friday. Speculation of Japanese intervention in the foreign exchange market to counteract a weakening domestic currency adds caution for USD/JPY bullish traders amid a lack of significant US economic releases.

The USDJPY continues the correction right now supported by the 200MA on the 4H. The pair is affected by the selloff on the dollar that started on Friday the next support is at 148.00.