USD/JPY approaches key breakdown as Nikkei 225 breaks bullish from range

USD/JPY declined to 154.35, testing critical support levels as the dollar faced renewed selling pressure while Japan's Nikkei 225 index achieved a bullish breakout above 39,500. The currency pair is approaching a significant technical breakdown level at 154.00, which has acted as strong support over the past month. A decisive break below could trigger accelerated selling toward 153.00-152.50 zone. Meanwhile, the Nikkei's breakout from its recent trading range signals improved risk appetite and potential yen strength from repatriation flows. EUR/USD advanced 0.4% to 1.0850, while GBP/USD gained 0.6% to 1.2745, confirming broad dollar weakness. AUD/USD also participated in the dollar selloff, rising 0.5% to 0.6680. Technical momentum indicators suggest further dollar weakness ahead, with the RSI on USD/JPY dropping below 40, indicating oversold conditions may be approaching but the downtrend remains intact.