The rally has been driven by dovish comments from Prime Minister Takaichi and continued fiscal expansion, which has increased the government’s tolerance for a weaker yen.

According to CIBC’s latest outlook, the bank now expects USD/JPY to rise toward 156 by the fourth quarter of 2026, revising its earlier forecast of 148.

CIBC sees almost no chance of a rate hike from the Bank of Japan (BoJ) in December. Analysts believe the central bank will stick to its dovish stance at least through early 2026.

At this point, CIBC projects that the BoJ’s first rate hike could come in January 2026 — but only if wage and inflation data justify such a move.

Japan’s Ministry of Finance (MoF) has expressed concern over sharp, one-sided movements in the yen, yet overall remains calm as long as the currency weakens gradually.

The 155 level is not viewed as a major problem for policymakers, but the MoF may step in if USD/JPY approaches 158.

CIBC’s short-term outlook for USD/JPY remains bullish. The bank expects the pair to continue rising but warns that the risk of currency intervention increases as the rate nears 158.

The critical level where more decisive government action is likely is 160.

Recent USD/JPY Performance:

  • Current rate: 1 USD = 154.035 JPY

  • 7 days ago: 153.8597 (▲ +0.11%)

  • 30 days ago: 150.6150 (▲ +2.27%)

  • 90 days ago: 147.8550 (▲ +4.18%)

  • 6 months ago: 145.6350 (▲ +5.77%)

  • Year-to-date: 157.7226 (▼ –2.34%)