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The USD/JPY pair attracts some buyers to around 154.05 during the early Asian session on Thursday. The US Dollar (USD) edges higher against the Japanese Yen (JPY) as US economic data alleviates concerns about the US economy and the labor market, prompting investors to weigh the likelihood of another interest rate cut this year.

Data released by the Automatic Data Processing (ADP) on Wednesday showed that private sector employment in the US rose by 42,000 in October, compared to the 29,000 decrease (revised from -32,000) recorded in September. This figure came in better than the market expectation of 25,000.

Meanwhile, the Institute for Supply Management (ISM) showed the US services sector activity picked up in October amid a solid increase in new orders. The ISM Services PMI rose to 52.4 in October, versus 50.0 prior, exceeding analysts’ forecasts of 50.8. Further repricing of Federal Reserve (Fed) rate cuts after the upbeat US economic data provides some support to the Greenback against the JPY.  

On the other hand, the hawkish Bank of Japan (BoJ) minutes might help limit the JPY’s losses. The BoJ minutes from its September meeting indicated a growing number of policymakers believed that conditions were falling into place for interest rates to rise, though some members remain cautious due to Japan's long history with deflation. 

Additionally, verbal intervention from Japanese officials could provide some support to the JPY and act as a headwind for the pair. Japan’s Finance Minister Satsuki Katayama said on Friday that it was “important for currencies to move in a stable manner, reflecting fundamentals.” He further added that the government was “closely watching FX moves with a high sense of urgency.”

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