The USD/JPY outlook shows a free-falling dollar as markets move to price in a higher likelihood of a super-sized Fed rate cut next week. At the same time, the yen strengthened as more Bank of Japan policymakers took on a hawkish tone. On Thursday, the dollar fell to a fresh low for the year after reports that the Fed might consider a 50 bps rate cut at next week’s meeting. Moreover, former Fed official Bill Dudley said that there was a strong case for a 50 bps rate cut. As a result, the likelihood of a 50 bps rate cut shot up from 28% to 45%. Data on Wednesday showed that core consumer inflation beat expectations in August. Therefore, market participants increased the likelihood of a 25 bps rate cut, boosting the dollar.Furthermore, data on Friday revealed that wholesale inflation was higher than expected. Recent data has pointed to a gradual pace for rate cuts. However, the reports on Friday showed that policymakers might consider a bigger cut.Meanwhile, the yen was strong after another policymaker supported more rate hikes. BoJ board member Naoki Tamura noted that the upside risk to inflation was increasing. Higher inflation creates the best conditions for the Bank of Japan to hike interest rates. USD/JPY key events todayInvestors do not expect any key economic reports from the US or Japan. Therefore, the pair might extend Thursday’s move. USD/JPY technical outlook: Bearish momentum eases near the 141.02 supportUSD/JPY 4-hour chartOn the technical side, the USD/JPY price is on the brink of falling below the 141.02 support level. The bias is bearish as the price has made a series of lower highs and lows, indicating a downtrend. However, the decline has slowed near the 141.02 key level. It is becoming harder for the price to make lower lows.At the same time, the RSI has made a bullish divergence, indicating fading bearish momentum. If this is the end of the road for bears, the price might bounce higher from 14.02 to challenge the 30-SMA resistance. A break above the SMA would confirm a shift in sentiment. On the other hand, if bears remain in charge, the price will stay below the SMA.More By This Author:USD/CAD Price Analysis: Dollar Weakens Post-DebateAUD/USD Outlook: Downside Bias Intact Ahead Of US CPIUSD/JPY Forecast: Strong Pullback As Yen Loses Luster