According to Kyodo News Agency, Japan's ruling parties are set to agree on an extra budget to fund more fiscal measures.

These measures are aimed at helping households and small businesses to cope with surging fuel costs.

The above report has rescued the JPY bulls, triggering a sharp pullback in USD/JPY from near 128.60 levels to 128.30, where it now wavers.

Earlier on, the Japanese Finance Minister Suzuki and BOJ Chief Haruhiko Kuroda voiced their discomfort over the recent devaluation of the domestic currency.

The BOJ offered to buy unlimited 10-year Japanese Government Bonds (JGBs) at 0.25% once again this Thursday.

Meanwhile, the rebound in the US dollar alongside the Treasury yields help cushion the downside in the pair. An increasingly hawkish Fed keeps the dollar and yields underpinned, as the focus now shifts towards Chair Jerome Powell’s speech.

USD/JPY technical levels