The dollar was trading down 0.31 percent vs the yen at 109.35 as of 10:00 GMT on Friday, as the dollar recovered slightly on the back of Fed rate hikes expectations.
The US dollar index, which measures the greenback’s strength against a basket of six major competitors, was up 0.26 percent at 93.62 by the time of this writing.
The American currency is supported by rising expectations that the Federal Open Market Committee will raise interest rates by 25 basis points during its next meeting.
The US regular will gather next week to announce its interest rate decision. At the moment, the benchmark rate stands in a range between 1.50 percent and 1.75 percent. If the Federal Reserve moves forward with the second rate adjustment of 2018, the dollar is likely to extend gains in the short term.
Economic reports and labor market conditions have been solid in the last couple of months, suggesting the Fed should keep on track with its monetary normalisation process. May report on unemployment and nonfarm payrolls boosted confidence among investors.
According to CME Group’s FedWatch tool, market participants are weighing in a 93.8 percent probability for a rate move in the June meeting.
For the moment, and considering the empty economic agenda, we expect the USDJPY pair to remain on a narrow range until next week. Technical analysis indicates that the 110.00 mark hasn’t worked as a solid support and it’s now again operating as a resistance. Technical indicators present a balanced scenario.
No major economic data is scheduled ahead in the day.