Market strategists at AT Global Markets anticipate that the USD/JPY pair could extend its upward momentum, potentially surpassing the 158 mark before the Bank of Japan's policy announcement on Friday.

"The Fed's hawkish stance confirms that the recent pullback in USD/JPY was somewhat excessive, and I foresee further upward correction in the coming trading sessions," noted Nick Twidale, chief market analyst based in Sydney.

Driven by the Federal Reserve's hawkish signals, the greenback could rally toward the 158.40 region, which aligns with the 200-day moving average. "This decision was in line with market expectations, yet given that Kevin Warsh was appointed by Trump, there had been lingering doubts in the market beforehand," he added.

"Going forward, shifts in interest rate differentials will hinge on how hawkish the Bank of Japan proves to be on Friday." Twidale further commented, "I do expect the BoJ to lean hawkish, which could spur some yen buying on Friday, but I believe the market has already priced in a substantial degree of hawkish expectations."

The USD/JPY pair traded nearly flat at 156.23, following a 0.8% gain in the previous session.