Later in the session on Friday, Fed commentary might influence risk expectations of a September interest rate hike. Increasing calls for policy easing in September may raise bets on further rate cuts in Q4, weakening US dollar demand.
A more dovish Fed policy stance could push USD/JPY toward the 50-day EMA. A drop below the 50-day EMA may expose the crucial 145 support level.
Conversely, calls to delay rate cuts to assess the effect of recent tariffs on US inflation could lift the appetite for the US dollar, sending the USD/JPY pair toward the 200-day EMA.
USD/JPY: Key Scenarios to Watch
Bearish USD/JPY Scenario: Strong household spending data, hawkish BoJ rhetoric, or dovish Fed signals. Such factors could send USD/JPY toward the 50-day EMA, potentially testing the 145 support level.
Bullish USD/JPY Scenario: Weaker-than-expected household spending, dovish BoJ rhetoric, or hawkish Fed guidance. These may drive the pair toward the 200-day EMA and potentially the 149.358 resistance level.
