USD/JPY: Analysts Upgrade Yen Forecasts on Policy Shift

USD/JPY faces downward pressure as major investment banks revise their yen forecasts higher, citing expectations of Bank of Japan policy normalization. The pair currently trades near 149.50, showing signs of exhaustion after reaching 8-month highs. Market participants anticipate the BOJ will accelerate its exit from ultra-loose monetary policy, with potential rate hikes expected by Q2 2025. Meanwhile, the Federal Reserve's dovish pivot and slowing US economic momentum reduce dollar support. Technical indicators suggest overbought conditions, with RSI above 70 and the pair trading well above its 200-day moving average at 147.20. Immediate support lies at 148.80, while resistance stands at 150.00. A break below support could trigger a deeper correction toward 147.50, especially if upcoming US inflation data disappoints. Traders should monitor BOJ Governor Ueda's upcoming speeches for policy hints.