USD/JPY eyes 155.00 support as oil prices impact market dynamics

USD/JPY declined 0.4% to 155.30 on Monday, approaching critical support at 155.00 as risk-off sentiment dominated currency markets. The pair's weakness coincided with a 2.1% drop in WTI crude oil prices to $78.50 per barrel, reflecting concerns about global demand amid trade tensions. Technical indicators suggest USD/JPY faces immediate support at the psychological 155.00 level, with a break below potentially accelerating losses toward 154.50. The Dollar Index fell 0.3% to 103.45, undermining the greenback's appeal despite relatively hawkish Fed positioning. Japanese yen strength was broad-based, with EUR/JPY and GBP/JPY also declining 0.3% and 0.5% respectively. Oil's weakness stemmed from worries about Chinese demand and potential trade disruptions. Traders are monitoring the 155.00 level closely, as a decisive break could signal further yen appreciation against major currencies.