The Japanese Yen (JPY) gains some positive traction following the release of stronger wage growth data from Japan earlier this Thursday and for now, seems to have snapped a three-day losing streak against its American counterpart. Moreover, talks that large Japanese firms are likely to increase wages by about 5% on average in 2025 and broadening inflationary pressures back the case for another rate hike by the Bank of Japan (BoJ). Apart from this, the cautious market mood, persistent geopolitical risks and concerns about US President-elect Donald Trump's tariff plans underpin the safe-haven JPY.
Meanwhile, the flight to safety triggers a modest pullback in the US Treasury bond yields, which keeps the US Dollar (USD) bulls on the defensive and contributes to driving flows towards the lower-yielding JPY. That said, skepticism about the likely timing of when the BoJ will hike interest rates again might hold back the JPY bulls from placing aggressive bets. Investors might also opt to wait for the release of the US Nonfarm Payrolls (NFP) report on Friday, which will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the USD/JPY pair.(Cay) Newsmaker23

Source: Fxstreet