USD/JPY trades near 158.50 in early November 2026 within a tight 156–159 range, driven primarily by the stable 250–275 basis point policy rate gap between the Federal Reserve (upper bound near 4.00%) and Bank of Japan (1.25%), which continues to support carry trades despite both central banks pricing December 25-basis-point hikes at roughly 70–80% odds. Recent U.S. nonfarm payrolls and softening Treasury yields following midterm results have capped dollar strength, while BoJ minutes signaling further normalization and Tokyo’s record intervention spending above 160 create a firm ceiling. Key near-term catalysts include the upcoming U.S. CPI release, December FOMC and BoJ decisions, and any escalation in intervention rhetoric, all of which reinforce trader consensus that the pair is likely to remain range-bound through year-end absent a decisive narrowing of the rate differential.