Hold on—something is happening with USDJPY, and it’s worth watching. The dollar fell solidly yesterday after weaker PMI data, and now the market is waiting for Non-Farm Payrolls on Friday. This will be key.

What’s going on with the Fed? Investors are pricing in about 62 basis points of rate cuts by the end of the year, but everything depends on what the next employment and inflation data look like. If they come in weak, we could see even more basis points of easing already in March. On the other hand, if the economy strengthens, the Fed could slow the pace, which would support the dollar.

On the yen side, things are more interesting. Tokijskie CPI came in below expectations, but inflation is still sitting above the 2% target. Bank Japonii is focused on wage growth, and the market is waiting for wage data. Right now, about 42 basis points of tightening are being priced in this year—that implies roughly two rate hikes. No policy changes before June unless wages suddenly jump.

Technically speaking, we have solid daily support at 154.50—the price has bounced off this level multiple times. Buyers may play from here toward 160.00, while sellers are waiting for a break. On the 4h chart, things are getting unstable, but a small trend line could provide support. On the hourly chart, we see an expanding wedge—this will be important for the short term.

Tomorrow, ADP and ISM Services; on Thursday, Japan wage data; on Friday, NFP. The whole week is marked by employment and wages. I’m keeping my finger on the pulse.