USD/JPY climbed to a new December high, testing 151.35 on Monday, as markets grew more doubtful about the BOJ delivering a rate hike this month. The odds of a December increase have fallen to around 30%, from over 60% just a week ago, amid expectations that policymakers will wait until early next year. With the BOJ seemingly in no hurry, yen bulls have lost traction, allowing the dollar to gain ground against the Japanese currency. Higher U.S. Treasury yields, along with oil price gains and reports of potential Chinese stimulus, have reinforced a global reflation narrative that supports risk assets and weighs on the yen.

On the technical front, USD/JPY faces pivotal resistance at the 50-day moving average (151.50) and the 200-day moving average (151.99). A sustained break above these levels would likely confirm a bullish trend and encourage the reestablishment of long USD carry trades. Immediate supports are located at the Ichimoku cloud top near 150.11 and the 149.40-60 area, providing a safety net if sentiment shifts. The overall trend has turned more constructive for USD/JPY, as diminishing downside risks and robust global growth expectations help keep the pair buoyant.

Looking ahead, the market’s attention will turn to upcoming central bank meetings and policy signals. The Fed is expected to cut rates next week, though cautious investor positioning and subdued volatility have tempered the pair’s ascent. Meanwhile, any shifts in BOJ guidance or a surprise surge in risk aversion could quickly alter sentiment. For now, USD/JPY appears poised to challenge key resistance levels, with yen bulls increasingly on the defensive as the year winds down.