USD/JPY Plunges Below 144 as Fed Rate Cut Expectations Diminish

USD/JPY has tumbled 0.8% to 143.50 in early Asian trading, marking its sharpest daily decline in two weeks as the Japanese Yen strengthens amid shifting Federal Reserve rate cut expectations. The pair's weakness reflects growing market skepticism about aggressive Fed easing, with futures markets now pricing just a 35% probability of a 50-basis-point cut in December, down from 60% earlier this month. The Yen's rally has been further supported by rising Japanese government bond yields, with the 10-year JGB yield climbing to 0.85%, its highest level since July. Technical analysis shows USD/JPY has broken below the critical 144.00 support level, opening the path toward 142.50. The 21-day moving average at 144.80 now acts as immediate resistance. Traders are closely monitoring upcoming US PCE inflation data and any signals from Bank of Japan officials regarding potential policy normalization, which could further strengthen the Yen.