USD/JPY Weekly Forecast: Interest Rate Differentials and Payroll Data Take Center Stage

The USD/JPY pair enters the new week with investors laser-focused on the upcoming U.S. non-farm payrolls report. As the primary catalyst for market volatility, U.S. interest rate expectations continue to dictate the pair's trajectory. Traders are closely monitoring the yield gap between the U.S. and Japan, as any deviation in labor market strength could significantly influence the Federal Reserve's policy outlook and, consequently, the strength of the dollar against the yen.