USD/JPY Slides Toward Key Support as Bearish Momentum Builds

USD/JPY is sliding toward a critical support zone as bearish momentum intensifies, reflecting growing divergence in monetary policy expectations between the Federal Reserve and the Bank of Japan. The pair has been under sustained selling pressure as markets increasingly price in potential Fed rate cuts while the BoJ signals a gradual normalization path, creating a narrowing interest rate differential that traditionally supports yen strength. Japanese economic fundamentals have been showing improvement, with stronger-than-expected GDP growth and rising wage data reinforcing the case for continued BoJ policy tightening. On the technical front, weakening momentum indicators suggest the downtrend may have further room to run, with traders watching key support levels for potential breakdowns or bounce opportunities. A decisive breach of near-term support could accelerate the decline and attract additional selling interest from trend-following strategies. Conversely, any hawkish surprise from upcoming Fed communications could provide temporary relief for the dollar. Traders should monitor US Treasury yields and BoJ rhetoric as primary drivers for directional cues in the sessions ahead.