USD/JPY bounces off its lowest level since August, upside potential seems limited

  • USD/JPY rebounds from its lowest level since August 23 amid a modest USD uptick.
  • The Fed’s dovish pivot keeps the US bond yields depressed and should cap the buck.
  • Hawkish signals by BoJ member underpins the JPY and acts as a headwind for the pair.

The USD/JPY pair stages a modest bounce from its lowest level since August 23 touched during the early European session on Thursday and climbs back above mid-136.00s in the last hour.

Having shown some resilience below a technically significant 200-day SMA, the US Dollar is attempting a recovery from the vicinity of a multi-month low set on November 15. This turns out to be a key factor that is lending some support to the USD/JPY pair. That said, any meaningful upside seems elusive in the wake of the overnight dovish-sounding remarks by Federal Reserve Chair Jerome Powell.

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