• USD/JPY ticks higher during the Asian session, though might struggle to capitalize on the move.
• Intervention fears, along with a softer risk tone, could benefit the JPY and act as a headwind.
• Traders also seem reluctant and look forward to the crucial US NFP report for a fresh impetus.

The USD/JPY pair attracts some dip-buying near the 148.30 area during the Asian session on Friday and reverses a part of the previous day's losses, albeit lacks bullish conviction. Spot prices currently trade around the 148.65 region, up just over 0.10% for the day, as traders prefer to wait on the sidelines ahead of the closely-watched US monthly employment details.

Heading into the key data risk, speculations that Japanese authorities will intervene in the foreign exchange market to support the domestic currency might continue to act as a headwind for the USD/JPY pair. Japan's Finance Minister Shunichi Suzuki reiterated this week that currency rates must move stably reflecting fundamentals and that the government was ready to take necessary action against excess volatility, without ruling out any options. This, along with a generally weaker risk tone, could benefit the safe-haven Japanese Yen (JPY) and contribute to capping gains for the major.

The downside, however, remains cushioned in the wake of a big divergence in the monetary policy stance adopted by the Bank of Japan (BoJ) and the Federal Reserve (Fed). In fact, the Japanese central bank, so far, has refrained from offering any hint about potential alterations to its dovish stance in the foreseeable future. Adding to this, the BoJ Governor Kazuo Ueda had said that the current policy framework has a big stimulative effect on the economy and the basic stance is to patiently maintain monetary easing. In contrast, the Fed struck a more hawkish tone and projected at least one more rate hike in 2023.

Moreover, the incoming US macro data remains consistent with expectations of solid economic growth in the third quarter and should allow the Fed to keep interest rates higher for longer. The outlook, meanwhile, remains supportive of elevated US Treasury bond yields, which assists the US Dollar (USD) to stall a two-day-old corrective slide from the YTD peak and lends some support to the USD/JPY pair. Bulls, however, seem reluctant and now look to the popularly known US NFP report for fresh cues about the Fed's future rate hike path before positioning for a firm near-term direction.

Technical levels to watch