Divergent central bank policies continue to anchor USD/JPY near 157.5, positioning the 150-160 range as the leading market-implied outcome at 39% for the December 31, 2026 close. The Federal Reserve’s recent unanimous rate increase and elevated odds of further tightening through year-end have sustained U.S. yield advantages, while the Bank of Japan’s September hike to 1.25% drew dissent and tempered expectations for rapid normalization, allowing the dollar to hold gains. Geopolitical tensions tied to Middle East developments have further supported risk-off flows into the dollar. Recent rate-check reports have introduced intervention risk that caps sharp upside, keeping the 160-170 bin at 21% as a secondary possibility if U.S. data remains firm. Key upcoming data releases and policy meetings in the fourth quarter will influence whether the pair stays range-bound or shifts toward higher or lower brackets by year-end.