💹Traders Eye 160.0 USD/JPY Target: Cable FX Macro

• USD/JPY pair is trading around 154.00, near an eight-and-a-half-month high, reflecting ongoing yen weakness amid divergent monetary policies between the Federal Reserve (Fed) and the Bank of Japan (BoJ). Overall sentiment leans mildly bullish for USD/JPY in the short term, fueled by the USD's yield advantage and global risk appetite, but with growing caution on overbought conditions and medium-term yen recovery risks. Retail and institutional traders are split, with contrarian signals emerging from high short positioning.

• Alternative market sources have flagged that leveraged funds are looking at the 160.0 level as a target in USD/JPY long trades. A Japanese desk said dollar-yen topside interest has been very popular among macro clients. The level is still around 600p from spot after the pair posted its best monthly gain since June.

• Institutional flows favor USD/JPY for yield, with Japanese importers and pension funds hedging in USD, creating consistent buying pressure. However, we're starting to see technicals stretched, RSI is diverging negatively on daily/weekly charts, hinting at consolidation or pullback risks to 151.70-150.47 support. Upside momentum is "potentially limited" near current levels.