Recent US CPI data showing hotter-than-expected inflation at 3.7% year-over-year has reinforced expectations for additional Federal Reserve rate hikes, widening the policy rate gap with the Bank of Japan and supporting USD/JPY near 158. The pair trades above its 200-day moving average amid elevated Treasury yields near 5.25%, though Bank of Japan intervention risks intensify above 160 following its September hike to 1.25%. Geopolitical tensions in the Middle East further bolster the dollar as a safe haven. Traders monitor the BoJ's late-October meeting and upcoming FOMC decisions for signals on the pace of monetary policy divergence, which continues to dominate near-term exchange rate dynamics.