USD/JPY gathers strength for a fresh break above 150.00 as US Dollar strengthens

• USD/JPY aims for a decisive break above 150.00 as the appeal for the US Dollar improves.
• S&P Global reported an uptick in US business activities in a survey in October.
• The BoJ focuses on replacing imported factors’ contribution to price pressures with higher wage growth.

The USD/JPY pair prepares for a decisive break above the psychological resistance of 150.00 in the late European session. The asset seems strong as the US Dollar Index (DXY) extended upside after S&P Global reported an uptick in business activities in the survey for October.

S&P500 futures generated losses in the London session, portraying a decline in the risk appetite of the market participants. The appeal for the US Dollar improves as strong business activity in October has improved expectations of further policy-tightening by the Federal Reserve (Fed).

On Tuesday, S&P Global reported that Manufacturing PMI kissed the 50.0 threshold for the first time since November 2022. The factory data at 50.0, outperformed expectations of 49.5 and September's reading of 49.8. The Services PMI landed at 50.9 against expectations of 49.9 and the prior release of 50.1.

The sentiment of the US firms improves as they expect that interest rates from the Fed are peaked for now. Going forward, investors will focus on the Q3 Gross Domestic Product (GDP) and the Fed’s preferred inflation gauge, which could impact the interest rate decision from the Fed in its monetary policy meeting on November 1.

Meanwhile, the Bank of Japan (BoJ) continues to remain fearful over the inflation outlook as higher price pressures have been majorly contributed by imported factors and the central bank is looking to replace them with higher wage growth. The expectations of a stealth intervention by Japan’s finance ministry in the FX domain remain persistent as the USD/JPY pair is hovering near 150.00.