USD/JPY pared back most of Thursday’s gains to test the top of the pre-retail sales 146-148 range.
In light of the failed attempt to press the 150 level, this would suggest that there is a bias to fade what has been a sizeable recovery in USD/JPY from the August 5 lows at 141.70.

With an equally impressive rally in risk assets as the S&P 500 .SPX trades within 2% of its July peak, traders have dipped their toes back into carry, emphasised by MXN/JPY trading in close proximity to 8.00.
That said, with SPX resistance between 5555-66 holding for now, and with the benchmark U.S 10-year yield US10YT=RR yet to take out 4%, this does keep USD/JPY bears in the fold.

As we look ahead to next week, the focus will be on central bank speak whereby both Fed Chair Jerome Powell and BoJ Governor, Kazou Ueda are expected to deliver their latest remarks on policy.
Though, with BoJ Deputy Governor, Shinichi Uchida, dialing down the hawkish rhetoric in the wake of the volatility within Japanese markets, it will be notable if Ueda follows suit, which in this case would likely prompt yen to weaken through 150 against the dollar.

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