With NFP coming up, what are people's expectations for its impact on $USDJPY? We're hovering near 161.67, and a strong print could easily push us towards 162. A miss, however, might see some unwinding of the recent USD strength. Looking at the implied volatility, seems the market is bracing for a decent move.
What if it's an in-line print? Does that just lead to more chop around current levels, or does the market try to find a new catalyst?
Regardless of NFP, the BOJ is still a wild card. Any subtle shift in their tone could overshadow the NFP impact on JPY.
I'm not so sure about 162 being an 'easy' push. There's been some strong resistance there previously. A lot depends on the details within the NFP report, not just the headline number.
Could be, but don't underestimate the potential for a 'buy the rumor, sell the news' reaction. Even a strong NFP might not translate to a sustained breakout above 162 immediately.
A miss would certainly make things interesting. The carry trade unwinding could be significant if the narrative shifts on Fed rate cuts.