The firm notes that with his speech, Powell has reaffirmed that the Fed stance is softening as he acknowledged downside risks to employment and that it could materialise in the form of layoffs. As such, they see that a similarly weak September jobs report to give the green light for the Fed to start cutting rates in the month ahead.In turn, that could signal the next leg lower for the dollar. That as policy divergence starts to manifest in a bigger way since other central banks are less dovish at the moment. MUFG notes that the ECB and BOE are less likely to cut further this year amid stabilising growth and stubborn price pressures. As for the BOJ, the firm says that speculation is building that it could continue back with rate hikes by year-end.On USD/JPY in particular, MUFG also argues a case on positioning play. That as the latest IMM data shows that leveraged funds have been piling back on JPY shorts in recent weeks. As such, positioning could be stretched and allows for an opportunity to short the pair amid the policy divergence above. This article was written by Justin Low at investinglive.com.