Recent monetary policy divergence continues to anchor USD/JPY near 156–157, with the Bank of Japan’s September 2026 rate hike to 1.25%—its highest in 31 years—failing to strengthen the yen after two dissents and cautious guidance. This contrasted with the Federal Reserve’s hawkish signals, including a signaled October move that lifted two-year Treasury yields and boosted the dollar index above 100. Japanese authorities have monitored volatility closely, with suspected rate checks near 158 reviving intervention risks amid holiday liquidity. Trader consensus on Polymarket, reflected in the 38.5% probability for a 150–160 close at year-end 2026, incorporates these near-term rate differentials and potential for gradual BOJ normalization offset by U.S. yield support, while acknowledging downside risks from any accelerated yen repatriation or coordinated FX defense.