USD/JPY falls 0.8% as Nikkei posts biggest drop in four months

USD/JPY declined 0.8% to 149.20 during Monday's Asian session as risk-off sentiment dominated following the Japanese stock market's sharpest decline in four months. The Nikkei 225 index tumbled 2.5%, triggering safe-haven flows into the yen and pressuring carry trades. The sell-off reflects growing concerns about global growth prospects and potential shifts in Bank of Japan policy normalization expectations. Technical indicators show USD/JPY breaking below the key 150.00 psychological level, with momentum indicators turning bearish. The pair now tests support at 149.00, with further downside targeting 148.50 (50-day moving average). Market participants are closely monitoring Japanese economic data releases this week, including household spending and wage growth figures, which could influence BoJ's policy trajectory. The current risk-averse environment favors continued yen strength, particularly if global equity markets extend their decline.