USD/JPY trims recent losses, nearing 154.00 with US data on tap

• The US Dollar's pullback finds support at 153.00 and crawls towards 154.00.
• The cautious tone of the BoJ's minutes has increased pressure on the Yen.
• US ADP data is expected to show a mild increase on net employment in October.

The US Dollar is trimming some losses against the Japanese Yen, returning to levels near 154.00 on Wednesday's European session, after hitting lows right below 152.00 on Tuesday. The Dollar's rebound, however, remains frail amid the risk-averse market mood, with all eyes on US employment and services activity data, due later today.

The cautious tone of the minutes of October's Bank of Japan (BoJ) Monetary Policy meeting has put some pressure on the Yen as some members remained wary about hiking interest rates further amid the downside risk to the economy stemming from US tariffs.

Earlier on Wednesday, Japan's top FX diplomat, Atsushi Mimura, warned that the recent Yen moves deviate from fundamentals, as the pair reaches levels that triggered BoJ interventions in 2022 and 2024.

The US Dollar remains firm in risk-averse markets

Risk aversion keeps driving markets on Wednesday as investors pare back bets of further Fed monetary easing in December, while the US government shutdown enters its fifth week without an end in sight and is on track to become the largest in history.

The US Dollar Index, which measures the value of the Greenback against a basket of currencies, remains steady near three-month highs, with investors awaiting the release of October's ADP Employment Report for further clues about the Fed's rate path.

Private employment is expected to have increased by 25,000, after a 32,000 decline in September. Still well below the 150,000 monthly new jobs averaged from 2010 to 2025.

Somewhat later, the US ISM Services PMI is expected to show a moderate rebound to 50.8 in October, from 50 in September.

Technical Analysis: USD/JPY remains bullish while above 153.00

The pair has broken the small triangle pattern around 154.20 and is now testing support at a previous resistance area at 153.00. Technical indicators are turning lower, as the Relative Strength Index dipped below the 50 level, but the bullish structure from mid-September lows remains in place.

Bears should push prices below the 153.00 area, where the 61.8% Fibonacci retracement of the October 29-30 bull run crosses trendline support. A confirmation below here would increase pressure towartds the October 30 low, at 152.20.

To the upside, the October 30 and November 4 highs, near 154.50, are likely to challenge bulls ahead of the February 13 high, at 154.85. Further up, the 127.2% extension of last week's rally, at 155.30, emerges as a potential target.