Image Source: Pixabay

The USD/JPY pair builds on the previous day’s breakout momentum through the 50-day Simple Moving Average (SMA) and attracts some follow-through buyers for the second straight day on Thursday. This also marks the third day of a positive move in the previous four and lifts spot prices to the 147.20-147.25 region, or the highest level since August 20 during the Asian session. The Japanese Yen (JPY) is undermined by blunt comments on monetary policy from the new Prime Minister Shigeru Ishiba on Wednesday, saying that Japan is not in an environment for an additional rate increase. Adding to this, Japan’s newly appointed economy minister, Ryosei Akazawa, expects the Bank of Japan (BoJ) to make careful economic assessments when raising interest rates again. This, along with the political uncertainty ahead of the October 27 snap election, continues to weigh on the JPY and acts as a tailwind for the USD/JPY pair.Meanwhile, the US Dollar (USD) manages to preserve this week’s strong recovery gains and stands tall near a three-week high amid diminishing odds for a more aggressive policy easing by the Federal Reserve (Fed). In fact, the markets have been scaling back their bets for another oversized Fed rate cut in November in the wake of a still resilient US labor market, reaffirmed by the upbeat ADP report on Wednesday. This is seen as another factor contributing to the bid tone surrounding the USD/JPY pair and supports prospects for additional gains. Even from a technical perspective, the overnight sustained break and close above the 50-day SMA, for the first time since mid-July, was seen as a fresh trigger for bulls. Furthermore, positive oscillators on the daily chart validate the constructive outlook and suggest that the path of least resistance for the USD/JPY pair is to the upside. Traders now look forward to the US economic docket – featuring Weekly Initial Jobless Claims and the ISM Services PMI. This, along with Fedspeak, will influence the buck and provide some impetus to the currency pair.More By This Author:Silver Price Forecast: XAG/USD Climbs To $31.30-$31.35 Area, Remains Below 23.6% Fibo. Level EUR/GBP Price Forecast: Resumes Downside BiasWTI Price Forecast: Bounces Off Two-week Low, Seems Vulnerable Near $68.00 Mark