USD/JPY faces liquidity concerns as gold reaches new highs

USD/JPY traded volatile around 149.20 as market liquidity concerns dominated Asian trading. The pair experienced choppy price action with wider-than-normal spreads during the session. Gold spot prices surged to $2,085 per ounce, reflecting growing safe-haven demand amid market uncertainty. The Nikkei 225's weakness and NVIDIA's recent volatility contributed to risk-off sentiment, benefiting the yen. Japanese investors remained cautious, with domestic flows supporting yen strength. Technical indicators suggest USD/JPY is testing critical resistance at 149.50, with failure to break higher potentially triggering a deeper correction. Support levels are seen at 148.80 and 148.30. Traders are advised to monitor liquidity conditions closely, as thin markets could exacerbate price movements. The correlation between equity weakness and yen strength remains strong, suggesting further downside risks for USD/JPY.