USD/JPY Rally at Risk as Global Growth Fears Revive Safe-Haven Yen

USD/JPY faces mounting headwinds as rising concerns over global economic growth threaten to unwind the carry trade rally that has supported the pair in recent weeks. The Japanese yen, traditionally a safe-haven currency, is attracting renewed demand as risk sentiment deteriorates across global markets. Growth fears are challenging the interest rate differential narrative that has kept USD/JPY elevated, as traders weigh the prospect of slower worldwide economic expansion against the Bank of Japan's gradual policy normalization. The Federal Reserve's rate trajectory also remains a key variable, with any dovish shift likely to narrow the yield gap and further support yen appreciation. From a technical standpoint, traders should watch for signs of a bearish reversal pattern on the daily chart, with key support levels becoming critical for determining the pair's near-term direction. A decisive break lower could signal a broader unwinding of carry trade positions, potentially accelerating yen strength. Risk-off sentiment and deteriorating macro data could keep the pair under sustained pressure.