After a previous surge, the USD/JPY pair entered a period of consolidation at higher levels, with the price approaching the key psychological threshold of 160. Yen bears remain highly vigilant, and the risk of intervention by Japanese authorities has once again become a core factor disrupting the market. Atsushi Mimura, Japan's top foreign exchange official, stated on Thursday that the recent exchange rate fluctuations have been too rapid, reminding the market not to forget the intervention measures taken during the summer. Simultaneously, Finance Minister Satsuki Katayama stated that the authorities are closely monitoring unilateral and rapid exchange rate anomalies, and the government will take appropriate measures to address sharp exchange rate fluctuations, while maintaining communication and coordination with the US Treasury Department. Meanwhile, Japan's wholesale inflation rebounded in October, and market expectations for a December interest rate hike by the Bank of Japan continue to rise, providing fundamental support for the yen and limiting the speed of its upward movement. After three consecutive days of strong gains, reaching a new high since April 2025, the US dollar has entered a brief respite, which is also a short-term factor suppressing further gains in USD/JPY. However, the market's repricing of the Fed's tightening path has clearly leaned towards a hawkish stance. Mitsubishi UFJ Financial Group analysts point out that the market has fully priced in a 25bp rate hike at the December FOMC meeting, while also incorporating the probability of a significant 50bp rate hike. Currently, the market is pricing in a total rate hike of approximately 28bp up to December and a total of 43bp up to January of next year, meaning that even if a 25bp rate hike occurs in December, the market still expects another 25bp hike early next year. In contrast to the Fed's clear tightening expectations, there is still considerable disagreement in the market regarding the pace and timing of the Bank of Japan's subsequent rate hikes. The huge interest rate differential between the US and Japan has not substantially narrowed, and carry trades remain the mainstream trading logic in the market, which makes it difficult for this to provide a sustained boost to the yen. Coupled with the volatile situation in the Middle East, the safe-haven appeal of the US dollar continues to play a role, and the market consensus leans towards the view that the short-term pullback in USD/JPY is a consolidation opportunity for the bulls, and the pullback is more likely to attract bargain hunters. On the daily chart, USD/JPY maintains a short-term bullish structure, with the price holding above the 100-day moving average at 158.97 and the 50% Fibonacci retracement level at 158.49, and slightly above the 61.8% retracement level at 159.79. This level has transformed from previous resistance into immediate support, and the bulls still have the upper hand. The key resistance level above is the 78.6% Fibonacci level at 161.64. A successful break above this level would open up further upside potential, challenging the current cycle high of 164.00. On the downside, if the price falls below 159.79, the first support level is at the 100-day moving average of 158.97, which is a crucial defensive level for the medium-term bullish structure. Further down, the 50% retracement level at 158.49, the 38.2% retracement level at 157.20, and the 155.59 level form a series of step-like support levels, with a deeper structural bottom support at 152.99. Editor's Summary : Currently, USD/JPY is caught in a battle between two main themes: verbal intervention from Japan and expectations of a Bank of Japan rate hike constitute an upward ceiling; continued hawkish expectations from the Federal Reserve, the high interest rate differential between USD and Japan, carry trades, and safe-haven demand in the Middle East support the US dollar, forming a downward floor. With the price approaching the 160 level, any intervention news could be sudden, significantly amplifying intraday volatility.