Recent USD/JPY levels near 158 reflect a persistent policy rate gap, with the Federal Reserve at 3.75-4.00% after its September hike and the Bank of Japan at 1.25% following its own move that month. Elevated U.S. Treasury yields above 5.2% and firmer U.S. inflation data have supported dollar demand, while Tokyo core inflation accelerating toward 2.7% keeps BoJ tightening expectations alive for December. Recent U.S. payrolls softness and BoJ meeting summaries have tempered near-term hike pricing on both sides, contributing to consolidation. Intervention risks from Japanese and U.S. authorities continue to cap rallies above 160. Key upcoming catalysts include the October 28 FOMC decision and the BoJ’s late-October meeting, where fresh inflation projections and guidance on the pace of normalization will influence the interest-rate differential that anchors the pair.