USD/JPY surged to 158.5 on Nov 8, 2026, driven by a strong US jobs report and near‑80% odds of a December Fed rate hike.

USD/JPY jumped to 158.505 on Nov 8, 2026, as a robust US jobs report revived expectations of a December Federal Reserve rate hike. Traders now watch the pair closely as it tests the 160 resistance, a level that could trigger a further rally toward 164 if broken.

Jobs data fuels Fed hike bets

The Bureau of Labor Statistics said the labor market added 165,000 jobs in October, a sharp rise from September’s 60,000. Cyclical employment hit 27.684 million – the highest since May 2001 – while the unemployment rate fell to 4.1% and participation rose to 61.9% in October. These figures pushed the FedWatch probability of a December hike to nearly 80%.

Higher hiring and overtime hours (average weekly overtime up to 4.1 hours) signal a resilient economy, prompting the two‑year Treasury yield to climb from 4.46% to 4.52%. The widening yield differential with Japan’s 2‑year yield at 1.73% makes dollar‑denominated assets more attractive, supporting the USD/JPY advance.

Technical picture around 160

Technical analysis shows USD/JPY trading in an ascending broadening wedge since April 2025. Support sits at S1 157.647, pivot at 158.115, and resistance at R1 158.974. A break above the 200‑day SMA at 158.67 could open a path to 160‑162, while a decisive close above 160 may target 164 and eventually the channel’s 175 resistance.

Conversely, a slip below the 50‑day SMA at 157.30 could expose the pair to 155, and a breach of 154 may trigger a move toward 152 and the longer‑term 145 area. The price has been consolidating between the 50‑ and 200‑day SMAs for the past month, keeping short‑term direction neutral.

Read also: Silver price forecast: rally faces US CPI test after dollar jump

Japanese wage and BoJ backdrop

Real wages in Japan rose 2.2% YoY in September, and BoJ Governor Kazuo Ueda warned that higher energy costs are feeding consumer prices. The wage trend strengthens the case for a BoJ rate hike from 1.25% to 1.5% in December, which could provide some support for the yen despite the current yield gap.

The BoJ’s upcoming summary of opinions on Tuesday will be watched for any signals of further tightening, which could lift Japanese yields and temper USD/JPY’s upside.

What’s next for the pair

All eyes now turn to the US CPI release on Nov 10, 2026. A strong inflation reading could cement expectations of additional Fed hikes in early 2027, keeping the dollar index robust and pushing USD/JPY higher. A softer CPI may give the Fed room to pause, potentially capping the rally.

• Nov 10 2026 – US CPI data
• Dec 2026 – Expected Fed rate hike decision
• Dec 2026 – Possible BoJ rate hike to 1.5%

Frequently asked questions

Official data sources

• Federal Reserve (Fed)
• Bank of Japan

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This article is compiled from international market news for information only. It is not investment advice.