USD/JPY Traders Warn of Risk of a Sharp Selloff

USD/JPY became the focus this week after the pair fell below 155 and the dollar's decline accelerated. According to Sina Finance, the pair dropped below 153 during Tuesday's Asian session and fell more than 700 points over the week. Over the past five years, USD/JPY has seen three separate declines of 20 big figures or more. If history repeats, the exchange rate could break well below 150 from its July high. For such a move to occur, the Bank of Japan's hawkish policy stance would need to continue through next week's policy meeting. Traders appear to be pricing in that scenario, especially after Prime Minister Sanae Takaichi did not oppose further rate hikes. The yen's strength has also spread across the G10 currency bloc. The latest move showed the yen strengthening against the New Zealand dollar, with NZD/JPY falling to its lowest level since December last year.