• The Japanese Yen ticks higher amid intervention warnings, albeit lacking bullish conviction.
• The divergent Fed-BoJ policy expectations keep a lid on any meaningful JPY appreciation.
• USD/JPY seems poised to register strong gains and end in the green for the fifth straight week.

The Japanese Yen (JPY) is seen oscillating in a narrow trading band against its American counterpart during the Asian session on Friday and consolidating this week's heavy losses to the lowest level since 1990. The Bank of Japan (BoJ) has offered few cues on when it will increase interest rates further, while the markets are now betting that the Federal Reserve (Fed) will not cut interest rates at least before the September policy meeting. This, in turn, suggests that the large difference in rates between the US and Japan will stay for some time, which, along with a stable performance around the equity markets, continues to undermine the safe-haven JPY.

The US Dollar (USD), on the other hand, holds steady near the YTD peak in the wake of expectations that the Fed will keep rates higher for longer on the back of still-sticky inflation. This turns out to be another factor acting as a tailwind for the USD/JPY pair, though bulls seem reluctant to place aggressive bets amid the recent verbal warnings from Japanese officials that they would intervene in the markets to stem any further JPY weakness. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the currency pair is to the upside and any meaningful corrective decline is more likely to be seen as a buying opportunity.