USD/JPY — Fed Hawkishness + Carry + Retail Divergence

USD/JPY at 161.74 testing levels above the 160.00 intervention threshold as Fed Chairman Warsh signals a tighter policy path. Despite BoJ verbal warnings, the +275bp OIS carry advantage (SOFR 3.63% vs TONA 0.98%) sustains the bid. Retail sentiment is 85% short, diverging from the institutional carry-driven trend; this extreme retail shorting increases the risk of a squeeze higher toward 163.00 unless the BoJ intervenes. JPY COT LF net short -115,036 reflects crowded carry positioning.