Crude oil prices remain strong near the resistance levels. The high cost of energy remains a risk to the purchasing power of households and company profits. These data suggest that the possibility of further hike by the BOJ remains in play.

I think that if expectations for Japanese rate increases relative to Federal Reserve, ECB and Bank of England rise, this could support the yen and weigh on USDJPY, EURJPY and GBPJPY.

USDJPY Forecast: 156 Support and 159 Resistance Define the Range

From a technical perspective, USDJPY has been trading within the ascending broadening wedge pattern that stretches from the April 2025 lows. The pair hit a low at the 152.88 level in September and produced strong rebound towards the 159 level.

Now, the pair is consolidating in a tight range between the 159 and 156 levels and is looking for the next direction. A break above 159 may push the pair towards 160, which is the key level for the short-term direction.