Tech Selloff and AI Slowdown Fears Test Yen's Safe-Haven Role

Dow futures dropped and tech shares tumbled after Anthropic led calls for an AI slowdown, injecting fresh risk-off tone into markets just as the Fed prepares its rate decision. Historically, episodes like this trigger yen buying as investors unwind carry trades and rotate into safety.

So far, that classic flight-to-yen reaction has been muted, overshadowed by the pull of surging US Treasury yields and hike expectations that keep USD/JPY supported. This tension between risk-off equity flows and yield-driven dollar strength is the key theme to watch into Wednesday's announcement.

Oil prices rising alongside falling equity futures adds another layer, hinting at inflation concerns that reinforce the Fed's hawkish case. For USD/JPY traders, the pair's reaction function around the Fed decision will reveal whether yield differentials or risk sentiment dominate price action this week.