Yen gains momentum as USD/JPY drops ahead of crucial BoJ meeting

The Japanese yen strengthened significantly against the dollar, with USD/JPY falling 0.9% to 151.10 as traders positioned for a potential Bank of Japan policy shift. The decline accelerated after breaking below the 152.00 technical support level, reaching a two-week low. Market participants are increasingly confident about a December rate hike, with overnight index swaps pricing in a 68% probability of a 25-basis-point increase. Recent comments from BoJ board members have reinforced hawkish expectations, while improving wage dynamics and steady inflation provide the central bank with room to normalize policy. Technical analysis shows USD/JPY targeting the 150.50 support zone, with momentum indicators suggesting further downside potential. Resistance is now established at 152.00-152.50. The yen's appreciation extends beyond the dollar, with crosses like EUR/JPY and GBP/JPY also declining sharply.