The USD/JPY pair attracts some dip-buying near the 138.75 region, or a fresh weekly low touched during the Asian session on Friday and recovers a part of the previous day's heavy losses. The pair is currently trading around the 139.30 area, up nearly 0.30% for the day.

A modest uptick in the US Treasury bond yields assists the US Dollar (USD) regain some positive traction following the overnight slump to a two-week low, which, in turn, is seen acting as a tailwind for the USD/JPY pair. The Japanese Yen (JPY), on the other hand, continues to be undermined by a more dovish stance adopted by the Bank of Japan (BoJ) and seems rather unaffected by comments from Governor Ueda Kazuo. Speaking before the parliament, Ueda said that the BoJ is implementing policies to achieve stable 2% inflation.

The upside for the USD, meanwhile, seems limited as investors remain uncertain over the Federal Reserve (Fed) rate hike path. In fact, the market seems convinced that the US central bank will pause its year-long rate-hiking cycle in June and the bets were reaffirmed by Thursday's weaker US data, showing that Initial Jobless Claims surged to a 20-month high last week. That said, the Fed funds futures indicate the possibility of another 25 bps Fed rate hike in July. Hence, the focus will remain glued to the key central bank event risks next week.

The Fed is scheduled to announce its monetary policy decision at the end of a two-day meeting on Wednesday, which will be followed by the BoJ meeting on Thursday. This, in turn, will play a key role in influencing the USD/JPY pair and help traders to determine the next leg of a directional move. In the meantime, worries about a global economic slowdown, particularly in China, could benefit the safe-havne JPY and keep a lid on any meaningful upside for the pair. Moving ahead, the US bond yields will drive the USD demand in the absence of any relevant macro data on Friday, which, along with the broader risk sentiment, might contribute to producing short-term opportunities around the major