USD/JPY trades lower around 148.00, focus is on US NFP data

• USD/JPY declines to near 148.00 as the US Dollar trades lower ahead of the US NFP data for August.
• The impact of the US NFP data will be significant on the Fed's monetary policy outlook.
• The Japanese Yen gains ground as rally in JGB yields hit pause.

The USD/JPY pair is down 0.25% to near 148.00 during the European trading session on Friday. The asset faces selling pressure as the US Dollar (USD) declines ahead of the United States (US) Nonfarm Payrolls (NFP) data for August, which will be published at 12:30 GMT.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, slides to near 98.00.

Investors will closely monitor the US official labor market data as it will influence market expectations for the Federal Reserve's (Fed) monetary policy outlook.

According to expectations, the US economy added 75K fresh workers, almost in line with the July's reading of 73K. The Unemployment Rate is expected to have accelerated to 4.3% from the former release of 4.2%.

Currently, the CME FedWatch tool shows that the Fed is certain to cut interest rates by 25 basis points (bps) to 4.00%-4.25% in the September policy. Fed dovish expectations intensified significantly in early August after the July's NFP report showed a downward revision in individuals employed in May and June.

Meanwhile, the Japanese Yen (JPY) has gained ground as rally in Japan's long-dated government bond yields hit pause. 30-year Japanese Government Bond (JGB) yields have corrected almost 2.3% from its all-time high of 3.3% to near 3.23%. Investors were dumping JGBs amid mounting fiscal debt concerns across the globe.