USD/JPY Pair Fades Upside Momentum as US Dollar Weakness Persists

The USD/JPY pair has stalled near the 50% Fibonacci retracement level of its intervention-led slump from a four-decade peak, indicating fading upside momentum. Despite some selling pressure at the start of the week, the pair lacks bearish conviction and shows resilience below the 159.00 mark. The US Dollar remains depressed amid receding Federal Reserve rate hike expectations, which is seen as a headwind for the USD/JPY pair.

The Bank of Japan's soft Q2 GDP print complicates its policy normalization path and holds back traders from placing aggressive bullish bets on the Japanese Yen. This lends support to the currency pair and warrants caution before positioning for deeper losses.