USD/JPY inter-markets: possibly a range-bound trading action ahead of Friday’s jobs data

The USD/JPY pair took another sharp knock of over 200-pips and dropped below 101.00 handle on Tuesday as markets seemed disappointed by Japanese government's announcement of additional fiscal stimulus measures to the tune of ¥28 trillion. Tuesday's fall occurred after last week's tumble as BOJ surprised by implementing only modest easing measures at a closely-watched meeting on Friday. The major took a breather and held on to its modest recovery gains above 101.00 handle throughout Wednesday's trading session.

Wednesday's release of ADP report, which showed better-than-expected private sector jobs growth, failed to assist the pair to extend its recovery gains. However, the data did provide a minor boost to expectations of an imminent Fed rate-hike decision in 2016 and limited further downslide. 

Meanwhile, the pair is unable to extract any impetus from flattening of the US and Japanese 10-years Treasury bond yields. However, a minor up-tick in the Volatility Index (VIX) is pointing to risk-off trade and seems to restrict immediate upside for the pair. 

Thursday's BOE monetary policy decision has the potential to fuel volatility in the FX market and boost the safe-haven appeal of the Japanese currency. However, ahead of Friday's US monthly jobs report (NFP), which would drive market expectations of an eventual Fed rate-hike decision later during this year, the pair seems unlikely to gain any further traction and could be confined in a narrow trading range around 101.00 round figure mark.