The USD/JPY currency pair has been experiencing fluctuations, with traders and investors closely monitoring various economic indicators. The recent Non-Farm Payroll (NFP) report missed expectations for the second consecutive time, leading to a subsequent decline in the USD/JPY. The drop in unemployment rates, combined with higher average hourly earnings, has raised concerns about more potential rate hikes by the Federal Reserve.

Domestically, Japan’s economic data has also influenced the pair’s movement. The Bank of Japan remains committed to its ultra-loose monetary policy, despite inflation remaining elevated. The central bank’s stance is based on the belief that inflation is internationally generated and doesn’t warrant a policy shift.

From a technical perspective, the USD/JPY is hovering around key support and resistance levels. The currency pair is currently trading within a range, with traders awaiting a breakout in either direction. Key support is identified at the 137.7 level, while resistance is seen around the 143.5 mark.

In the coming days, the market’s focus will shift to the US Consumer Price Index (CPI) report. A higher-than-expected inflation rate could lead to anticipations of further rate hikes by the Federal Reserve, potentially strengthening the US dollar against the yen. Conversely, a lower inflation rate might provide relief to the markets, leading to a rally in the USD/JPY.