BUZZ-COMMENT-Yen dip buyers emerge after US data

Dip buying of the yen has been a factor supporting the Japanese currency for about a month now and after Friday’s mixed U.S. jobs data report doesn't appear to have deterred that trend.

Yen crosses have trimmed earlier gains and USD/JPY is well below its session high of 152.42 reached after the jobs report. Downward momentum may build if it stays below its 151.86 lower Bollinger.

Yen buyers appear to be motivated by expectations for policy rate convergence. A rate hike by the Bank of Japan in June is now seen as a coin toss. Growing expectations of BOJ tightening is fueling yen call activity and prompting carry traders to explore alternative funding currencies.

In addition to monetary policy shifts, investment flows and political developments also support the yen. U.S. private equity firm Bain Capital has acquired Mitsubishi Tanabe Pharma for $3.4 billion, driven by the prospect of regulatory changes in Japan.

On Friday, U.S. President Donald Trump was set to meet with Japanese Prime Minister Ishiba. The discussions are expected to touch on regional defense, Nippon Steel’s bid for U.S. Steel, exchange rates, tariff policy, and U.S. investment. On Thursday, U.S. Treasury Secretary Bessent said that the U.S. does not want countries to weaken their currencies for trade manipulation. Whether this concern applies to Japan remains unclear. However, with the yen trading much weaker than long-term valuations suggest, traders will be wondering if it could be a point of discussion. A press conference is scheduled for 1:10 p.m. EST.

For more click on FXBUZ