USD/JPY drops as dollar confidence weakens on US policy concerns

USD/JPY declined 0.6% to 155.20 during Monday's Asian session as macro traders expressed growing concerns about self-inflicted harm to the US dollar from American policy decisions. The pair's weakness reflects diminishing confidence in dollar strength amid uncertainty over trade policies and their potential economic impact. Market participants are increasingly positioning for yen strength as a safe-haven play against US policy volatility. The move accelerated as broader dollar selling emerged across major pairs, with traders citing fears of protectionist measures undermining US economic growth. Technical analysis shows USD/JPY breaking below the 155.50 support level, opening the path toward 154.80. The 200-day moving average at 154.00 represents the next major support. Rising implied volatility suggests traders expect continued uncertainty, potentially benefiting the yen as traditional risk-off flows return to Japanese currency markets.