Ella 
USD/JPY attracted some shorts around 160.65 during Asian session on Friday. Verbal intervention by Japanese authorities and a weaker dollar triggered the selling of the pair. Focus on the US non-farm payrolls report for June on Friday is expected to grow by 190,000.
Japanese Finance Minister Shunichi Suzuki said on Friday that the weak yen is pushing up import costs and affecting prices. Suzuki also said that he “will keep a close eye on the stock and foreign exchange markets and remain vigilant.” This verbal intervention lifted the yen and is bearish for USD/JPY.
However, any significant appreciation of the yen may be limited amid the dovish stance of the Bank of Japan. The Bank of Japan remains reluctant to provide detailed plans for reducing bond purchases and further rate hikes.
On the dollar side, the possibility that the US Federal Reserve will start an easing cycle in September has increased, dragging the dollar to a three-week low near the 105.00 support level. According to the CME FedWatch Tool, financial markets are currently pricing in a 25 basis point (bps) rate cut by the Federal Reserve in September at a nearly 70% chance, up from 58.2% last Friday.
On the other hand, the cautious stance of Fed officials and the minutes of the June FOMC meeting may boost the dollar. Fed officials lack confidence that they must cut interest rates, while several policymakers have said that if inflation recovers, it is necessary to raise interest rates again.
