USD/JPY surges as Fed expectations trigger stop-loss cascade

USD/JPY has broken through key resistance levels, advancing sharply as stop-loss orders accelerated the upward momentum following hawkish Federal Reserve positioning. The pair's surge reflects growing market expectations for sustained higher US interest rates, with traders repositioning ahead of upcoming Fed communications. Technical indicators suggest the stop-loss cascade has pushed the pair into overbought territory, with immediate resistance emerging near recent highs. The Bank of Japan's continued dovish stance contrasts sharply with Fed policy, widening the interest rate differential that supports USD/JPY strength. Momentum indicators signal potential for continued upside if the pair maintains above newly established support levels. The rapid move has caught many traders offside, forcing position adjustments that amplified the rally. Near-term consolidation appears likely as the market digests these sharp gains, though the fundamental backdrop remains supportive for further dollar strength against the yen.