USD/JPY Pressured as Resurgent Yen Carry Trade Unwind Reshapes FX

USD/JPY is facing renewed downward pressure as the Japanese yen reasserts its strength across global markets, driven by a resurgence in yen carry trade unwinding that is sending ripple effects through equities, bonds, and forex. The move reflects shifting expectations around the Bank of Japan's monetary policy trajectory, with markets increasingly pricing in further normalization steps, while the Federal Reserve's rate path remains uncertain. The Nikkei 225 has come under pressure as yen appreciation weighs on Japanese exporters, while gold futures have firmed on the broader risk-off backdrop. Nvidia's role as a market bellwether adds to the cross-asset volatility narrative. Technically, USD/JPY is testing key support levels, and a decisive break lower could accelerate the move toward multi-month lows. Traders should watch for BOJ commentary and US economic data releases as catalysts. The yen's resurgence has implications well beyond USD/JPY, affecting EUR/JPY and GBP/JPY crosses as the carry trade recalibration continues to reshape global capital flows.