USD/JPY faces pressure as BOJ meeting approaches amid volatility fears

USD/JPY remains under scrutiny near 156.50 as markets brace for potential Bank of Japan policy adjustments, with the VIX compression suggesting complacency that could trigger sharp moves. The upcoming BOJ meeting poses significant risk for yen pairs, particularly if officials signal further normalization steps following recent hawkish rhetoric. Japan's 10-year yields have climbed to 1.15%, reflecting expectations of policy tightening and supporting yen strength. Meanwhile, US equity markets continue grinding higher with the S&P 500 reaching new records, but the compressed volatility environment (VIX below 15) indicates potential for rapid reversals. Technical analysis shows USD/JPY facing resistance at 157.00, while support sits at 155.80. A hawkish BOJ surprise could rapidly push the pair toward 154.50, while disappointment might see a relief rally toward 158.00.