USD/JPY Eyes 146 Support as Fed-BoJ Policy Divergence Widens

USD/JPY has retreated 1.2% to test the critical 146.00 support level, pressured by growing divergence between Federal Reserve and Bank of Japan monetary policies. The Fed's increasingly dovish stance, with markets pricing in 75 basis points of rate cuts by year-end, contrasts sharply with the BoJ's hawkish pivot following Governor Ueda's recent comments on potential rate normalization. Technical indicators show the pair breaking below its 50-day moving average at 147.85, with momentum oscillators turning bearish. The 146.00 level represents confluence support from the 200-day moving average and previous resistance-turned-support. A decisive break below could accelerate losses toward 144.50, while any recovery faces strong resistance at 148.00. Traders are closely monitoring upcoming Fed minutes and Japanese wage data for further directional cues on this policy divergence trade.