Traders assign closely matched probabilities to USD/JPY closing 2026 in the 140-150, 150-160, or 160-170 ranges, underscoring uncertainty over the U.S.-Japan interest rate differential and its impact on yen valuation. The Federal Reserve’s measured approach to easing amid sticky core inflation contrasts with the Bank of Japan’s measured exit from ultra-loose policy, sustaining carry-trade flows that have kept the pair range-bound near current levels. Recent U.S. CPI and employment releases alongside BoJ yield-curve-control signals have reinforced this balance, while elevated Treasury yields continue to support the dollar. Upcoming FOMC and BoJ meetings through year-end remain the primary swing factors that could tilt the rate gap and break the deadlock in market-implied odds.