USD/JPY faces headwinds despite yen weakness on Fed uncertainty

USD/JPY declined 0.4% to 156.80 as broad dollar weakness offset traditional yen underperformance during risk-off episodes. The pair retreated from near 1-year highs around 157.50 as Fed independence concerns triggered widespread USD selling. Despite typical safe-haven demand, the yen's gains remained limited due to the Bank of Japan's persistently dovish stance and negative real yields. US Dollar Index fell 0.8% to 108.20, weighing on all USD pairs. Technical analysis shows USD/JPY finding support at 156.50 (20-day MA) with resistance at 157.50. The 200-day MA at 154.80 marks major support. Markets are monitoring whether Fed turmoil will continue pressuring the dollar or if focus returns to the significant US-Japan rate differential, which traditionally supports USD/JPY upside.