USD/JPY plunges to 147.00 on BoJ’s rate hike bets, US NFP eyed

• USD/JPY extends its losing spell as the Japanese Yen strengthens on hawkish BoJ bets.
• The US Dollar weakens on firm expectations for the Fed reducing interest rates in June.
• Investors await the US NFP for fresh guidance.

The USD/JPY pair continues its losing spell for the fourth trading session on Friday. The asset falls vertically to 147.00 on firm expectations that the Bank of Japan (BoJ) will pivot to raising interest rates after keeping them in the negative territory for more than a decade.

S&P 500 futures are positive in the European session, indicating a higher risk appetite of the market participants. The 10-year US Treasury yields have dropped significantly to 4.07% as Federal Reserve (Fed) Chair Jerome Powell has recognized the need to dial back the restrictive monetary policy stance to prevent the economy from falling into a recession.

Market expectations for the BoJ exiting the ultra-dovish policy stance increase after a few policymakers said a positive wage cycle is in sight. This has convinced investors that steady wage growth would keep inflation above the 2% target. Investors hope that the BoJ will quit the expansionary policy stance itself in the March policy meeting.

Meanwhile, the US Dollar is under pressure Fed Powell said the central bank is not so far from gaining confidence that inflation will come down to 2%. The US Dollar Index (DXY) has continued its five-day losing spell to Friday and has refreshed its seven-week low at 102.70.

Going forward, the US Dollar will be guided by the US Nonfarm Payrolls (NFP) data for February, which will be published at 13:30 GMT. The Unemployment Rate is anticipated to remain unchanged at 3.7%. Economists have anticipated that the United States employers recruited 200K jobs, lower than the robust hiring of 353K in January.