ANZ Research discusses USD/JPY outlook and targets.

"USD/JPY has traded broadly in a 157–159 range in the last few weeks, with some marginal falls towards 156. The BoJ's October hold was hawkish with board member Hajime Takata’s dissent in favour of a hike. The Board's first acknowledgement that underlying inflation is "generally consistent" with 2% mattered more than the decision itself. Governor Ueda's refusal to ‘wait and see’, stressing decisions are taken "at every meeting, including the next one", alongside a faster ETF sell-down, keeps the December decision live in our view, though markets are only reflecting a 50% probability of a hike," ANZ notes.

"We expect hikes in December and March, taking the policy rate to 1.75%. The risk is that those hikes move out to January. Smaller firms are deferring capital expenditure, making December’s Tankan inflation expectations pivotal. Yet the BoJ's forecasts imply a prolonged overshoot, weakening the case for an extended pause," ANZ adds.

ANZ targets USD/JPY at 156 by year-end and 154 in Q1 of 2027.