[Can USD/JPY break through 158?] This week's Fed and Bank of Japan, which will determine the yen’s depreciation?

On Tuesday, October 27, the USD/JPY is hovering in the upper 157s.

Last week it fell sharply from the 158 range to the 156 range, but again 158 is approaching.

Will the yen continue to weaken like this?

The key this week lies with the Federal Reserve and the Bank of Japan.

? In the first place, what is the relationship between interest rates and USD/JPY?

Simply put, currencies with higher interest rates tend to be bought when deposited money earns more interest.

If U.S. interest rates are higher, the dollar tends to be bought; if Japanese rates rise, the yen tends to be bought.

However, the forex market also moves on expectations of future interest rates, so it isn’t simply decided.

? Three geniuses forecast!

? A: Ultra-optimistic

“If the U.S. maintains high rates and Japan is cautious about rate hikes, we could break through 158 and aim for 159!”

? B: Ultra-cautious

“But what if Japan shows an proactive stance on additional hikes? The yen could be bought back toward the 156s!”

? C: A different perspective

“Actually, it’s not so much whether rates change, but how much the market’s expectations differ from the announcements.”

For example, even if rates are kept unchanged, strong hints of future hikes can move the market.

? This week’s USD/JPY forecast

Upside scenario: 158–159 yen

If the outlook for prolonged high U.S. rates remains, dollar buying could intensify.

Downside scenario: 156–157 yen

If expectations for Japan’s further rate hikes rise, yen buying could advance.

Flat scenario: 157–158 yen

If both markets align with expectations, a clear direction may not emerge.

✅ Finally

The point this time is not just the outcome of the rate decision.

It is the difference between “what the market expected” and the “actual announcement.”

Whether it breaks through 158 or returns to the 156s again.

This week, U.S. and Japanese monetary policy are likely to be important factors shaping the USD/JPY direction.

Which do you think will happen: a breakout above 158 or a drop to the 156s?