USDJPY 2026 Outlook — A Simple 40 Year PerspectiveUS Dollar vs Japanese YenICMARKETS:USDJPYKwaggaRobertseUSDJPY has been climbing back toward levels last touched during the 1985 crash, and the big question is: HOW FAR CAN THIS GO? Why it's rising: The US-Iran conflict has disrupted oil flowing through the Strait of Hormuz. Japan imports almost all its oil from this region, so the conflict is hurting Japan's trade balance and weakening the yen — even though the yen is usually a "safe haven" in crises. On top of that, US interest rates are still much higher than Japan's, which keeps pressure on the yen too. What the Major banks think for year-end 2026: Nomura: 140 — if the BoJ raises rates and the Fed cuts as planned Citi: 142 — same reasoning JPMorgan: 165 — yen stays structurally weak regardless UBS: 175 (base case 155) — if oil spikes toward $150/barrel Could it hit 170? Yes, it's realistic — but it needs both the oil/energy squeeze to stay severe and the BoJ to stay slow on rate hikes. It's not the consensus case, but it's on the table. Key risk to watch: This rally is unusually tied to oil and the Strait of Hormuz specifically, not just general risk sentiment. A sudden ceasefire or oil price drop could reverse it quickly — probably faster than most technical levels would suggest. Bottom line: War continuing = tailwind for the rally toward 170+. War ending or BoJ hiking aggressively = risk of a sharp pullback toward 140–150. Watch oil prices and BoJ meetings more than headlines about the war itself. Not financial advice — for educational/informational purposes. Kwagga.