USD/JPY climbed above the important 158.50 level as traders focused on U.S. inflation data and reacted to the Household Spending report from Japan. The report indicated that Household Spending declined by -2.8% month-over-month in September, compared to anlayst forecast of +0.3%. On a year-over-year basis, Household Spending decreased by -6.8%.

If USD/JPY manages to stay above the 158.50 level, it will head towards the resistance level at 160.00 – 160.50. The key question is whether BoJ is ready to provide support to the yen in case USD/JPY climbs above the 160.00 level. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.