USD/JPY dips as Japan economy watchers index improves to 44.4

USD/JPY has retreated 0.2% to 155.80 following Japan's May economy watchers survey index rising to 44.4 from 42.6 previously. The improvement was driven by stronger household sentiment and increased retail activity, though business conditions softened due to easing manufacturing sector pressures. Employment prospects also showed notable improvement, suggesting potential resilience in Japan's domestic economy. The data reinforces expectations that the Bank of Japan may maintain its current policy stance, providing underlying support for the yen. Technical indicators show USD/JPY facing immediate resistance at 156.20, with support established at 155.50. The pair's reaction to this data suggests traders are positioning for potential yen strength, especially if upcoming US economic releases disappoint. Further downside momentum could target the 155.00 psychological level.