USD/JPY retreats 0.6% to 150.85 as traders position for deeper correction amid shifting monetary policy expectations. The pair has declined 180 pips from last week's 152.65 peak, with selling pressure intensifying below the 151.50 support level. Bank of Japan officials increasingly signal readiness to normalize policy, with Deputy Governor Uchida suggesting potential rate hikes if inflation remains above target. Meanwhile, Federal Reserve members hint at possible pause in rate hikes amid cooling US economic data. S&P 500 futures down 0.8% reflect risk-off sentiment supporting yen safe-haven demand. Technical indicators show bearish divergence on the daily RSI, with immediate support at 150.50 (38.2% Fibonacci retracement). A break below could accelerate declines toward 149.80-150.00 psychological zone. The policy cycle divergence between tightening BoJ and potentially dovish Fed shift creates favorable conditions for sustained USD/JPY weakness.
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