Fundamental Market Analysis for January 2, 2026 USDJPYUS Dollar/Japanese YenSAXO:USDJPYFresh-Forexcast2004USD/JPY is hovering near 156.800 amid mixed sentiment: the dollar gets some support from early-year flows, but demand for the yen remains steady due to uncertainty about global growth. The holiday effect is still limiting volumes, making the market more sensitive to official comments and unexpected news. Fundamentally, the yen is supported by expectations that the Bank of Japan will continue policy normalization in 2026. Japanese yields rose notably into the end of 2025 as bond purchases were reduced and communication pointed to the possibility of additional rate increases, while officials closely monitor excessive yen weakness. Stronger normalization expectations reduce the appeal of yen-funded strategies and work against further upside in USD/JPY. On the U.S. side, the key is the outlook for rates and yields: if the market keeps pricing Fed cuts in 2026, the yield gap between the U.S. and Japan should narrow, which favors the yen. If risk appetite deteriorates, demand for defensive assets may also strengthen, limiting the dollar against the yen. The base scenario for the next sessions is downward movement in the pair. Trading recommendation: SELL 156.800, SL 157.300, TP 155.300