The USD/JPY pair faced selling pressure during Thursday's Asian trading session, ending a two-day winning streak. The previous day, the pair surged near the psychological level of 160, reaching its highest level since early September. However, the current price is showing some resilience below 159. With mixed fundamental factors, aggressive bearish traders should remain cautious until a clear breakout occurs. The Bank of Japan's preliminary Corporate Goods Price Index (CGPI) showed that wholesale inflation rose 0.7% month-on-month in October, the first increase in three months; year-on-year, it rose to 7.1% from 6.8% in September, indicating a renewed recovery in wholesale inflation and further supporting market expectations for a December rate hike by the Bank of Japan. Meanwhile, Japan's top foreign exchange official, Atsushi Mimura, warned against excessive volatility in the foreign exchange market, verbally increasing market expectations for Japanese intervention, which provided a mild boost to the yen. As for the US dollar, the dollar index continued its two-day rebound, stabilizing above its highest level since April 2025, putting some downward pressure on the USD/JPY pair. However, the market continues to digest the possibility of a December rate hike by the Federal Reserve, or even a one-off 50 basis point hike, providing underlying support for the dollar. The geopolitical risk premium from the US-Iran standoff persists, further benefiting the safe-haven dollar. Trump signaled a decrease in the probability of further US military action against Iran in the short term, with the market hoping for a negotiated solution to the conflict. However, the US military's repeated strikes on Iran's Qeshm Island and Iran's attacks on Omani islands used for navigation in the Strait of Hormuz have weakened expectations of diplomatic reconciliation. The Fed's hawkish expectations, coupled with recurring geopolitical conflicts, have led the market to favor buying USD/JPY on dips, limiting the downside potential. On the daily chart, USD/JPY has stabilized above the 100-day simple moving average at 158.99, maintaining a bullish tone in the short term. Currently, the price is consolidating below the 61.8% Fibonacci retracement level of the recent rally from 152.88 to 164.00 at 159.75, with the next significant resistance level at the 78.6% retracement level at 161.62. On the downside, the first support level is the 100-day moving average at 158.99, followed by the 50% Fibonacci retracement at 158.44; a deeper retracement would target the 38.2% retracement level at 157.13, with medium- to long-term structural support at 155.51 and the starting point of the upward move at 152.88. On the 4-hour chart, the price has pulled back after a surge, but key moving averages are still providing support, and indicators haven't entered deep oversold territory, suggesting a consolidation after the rise. Only a decisive break below 158.99 would weaken the bullish trend. Editor's Summary : The USD/JPY pair is caught between two forces: Japanese inflation data is boosting expectations of a Bank of Japan rate hike, and intervention rumors are favorable for the yen; however, expectations of a significant Fed rate hike and ongoing US-Iran geopolitical risks continue to support the dollar. Short-term risks: A stronger intervention signal from Japan could lead to a sharp decline in the exchange rate; a potential opportunity is a resurgence of US inflation, reinforcing expectations of Fed tightening and pushing the exchange rate to challenge the 159.75-161.62 resistance level.