Anna 
As the European session commences on Thursday, the Japanese Yen (JPY) finds itself on the back foot, lingering near the lower end of its weekly range. This decline is attributed to diminished expectations for an early interest rate hike by the Bank of Japan (BoJ).
Additionally, the prevailing risk-on sentiment in the market undermines the appeal of the safe-haven JPY, further boosting the USD/JPY pair. However, traders exhibit caution in placing aggressive bets, preferring to adopt a wait-and-see approach ahead of significant central bank events scheduled for next week.
One such event is the BoJ’s policy decision announcement slated for Tuesday, followed by the outcome of the two-day FOMC meeting on Wednesday. The recent outcome of Japan’s spring wage negotiations, indicating widespread acceptance of trade unions’ wage rise demands by most firms, suggests a potential shift in the BoJ’s policy stance. Moreover, the growing consensus that the Federal Reserve (Fed) will commence interest rate cuts in June could limit further gains for the USD and the USD/JPY pair.
