USDJPY rises with investors focusing on NFP

After dropping the previous two sessions, the U.S. dollar advanced against the Japanese yen on Thursday amid expectations U.S. non-farm payrolls data will show further progress in the labor market.

The green currency remained favorite to investors due to divergence in monetary policy between the Federal Reserve and other major central banks.  

Investors believe the Fed will raise interest rates later in the year as recent economic data has showed signs of progress.

Traders expect to see the first borrowing cost hike since 2006 in October, yet tomorrow’s jobs report critical as mirrors the conditions of the labor market.

American employers added 240,000 jobs last month, according to median forecasts for the NFP report.

On the other hand, the recent mixed data from Japan have failed to convince investors the BOJ bold stimulus measures are capable of holding inflation.

The USDJPY pair is currently trading around 120.11 after touching a bottom of 119.61, noting that the pair ended the previous week on a gain of almost 0.5 percent.

In general, the pair’s movements are sideways, following the strong bullish direction that started in October 2012.  

The USDJPY is moving within a potential upside channel, where a breakout to either its support line or resistance line would determine the next direction.