•  The 50-day SMA has provided support for USD/JPY, which is currently in the process of recuperating.

• The pair is being supported by lackluster Japanese real wage data and a positive market mood.

• The pair is facing a headwind as rumors circulate that the Bank of Japan may reduce its bond purchases, which would provide support to the Yen.

USD/JPY is trading above 156.00, up 0.8% on Wednesday. The pair is supported by a weakening Japanese Yen, which shows real wages declining for the 25th straight month in April due to domestic inflation outpacing wage growth. This makes it harder for the Bank of Japan (BoJ) to normalize policy and support its beleaguered currency. Rumors that the BoJ is poised to reduce its bond purchases at its June policy meeting benefit JPY, but it remains to be seen whether these rumors materialize. The risk of intervention is also a constant threat to USD/JPY bulls, as Deputy Governor Ryozo Himino has raised concerns about the BoJ’s potential intervention in Forex markets. US jobs data, ISM Services PMIs, and US Nonfarm Payrolls could also impact the pair. 

• The emphasis is on the US ISM Services PMI data, as the silver price remains sideways below $30.00.

•  The US ADP reported that private payrolls were 152K, which was lower than the estimated figure of 173K.

•   The Federal Reserve’s restrictive monetary policy framework is unfavorable in the context of normalizing labor market conditions. 

The silver price (XAG/USD) remains sideways below the psychological resistance of $30.00, despite weaker-than-expected private payroll data for May. The report shows normalizing labor market conditions, fueling expectations of the Federal Reserve reducing interest rates and weighing on the US Dollar. Volatility in the US Dollar is expected to remain high as investors await the US ISM Services PMI data for May, which is expected to return to expansion.