USD/JPY rebounds to 147.50 after Powell-driven selloff, volatility persists

USD/JPY has staged a notable recovery to approach 147.50 following Friday's sharp selloff triggered by Fed Chair Powell's dovish Jackson Hole speech. The pair initially plunged as Powell acknowledged economic risks warranting potential policy adjustment, with markets now pricing 84% odds of a September rate cut. Despite the initial dollar weakness, USD/JPY has bounced back approximately 150 pips from Friday's lows, highlighting increased volatility in the pair. The recovery suggests some traders may be taking profits on short positions or viewing the selloff as overdone in the near term. However, the broader bearish sentiment remains intact with Nomura maintaining its short position targeting 142.00 by October. Technical analysis shows immediate resistance at 147.50-148.00 zone, while support has formed at Friday's lows near 146.00. The pair's sharp moves reflect conflicting forces between Fed easing expectations and potential BOJ policy tightening, creating challenging trading conditions requiring careful risk management.