While recent US data releases have weighed on the US dollar, USD/JPY has been relatively supported by the lingering JPY selling flows of Japanese investors and companies, notes Bank of Tokyo Mitsubishi (BTMU).
The weaker data may break support for USD/JPY at 118.00-level. Yet, Japanese companies and investors may limit the downslide for USDJPY near the 117.00-level.
A weak non-farm payroll report would increase downside risks for USD/JPY. In contrast, if the non-farm payroll report proves better than expected it will support the US dollar although upside beyond the 120.00-level may prove limited.
All in all, BTMU see USD/JPY trading in 117.50-121.00 range over the coming few weeks.