USD/JPY gains traction above 158.00 on Trump Greenland deal optimism, eyes on BoJ meeting

• USD/JPY gains ground to near 158.30 in Thursday’s early Asian session. 
• Trump said he reached a framework deal on Greenland, supporting the US Dollar. 
• The BoJ is widely expected to maintain its policy rate at its January meeting on Friday. 

The USD/JPY pair trades in positive territory around 158.30 during the early Asian session on Thursday. The US Dollar (USD) strengthens against the Japanese Yen (JPY) amid hopes for a solution in US President Donald Trump’s ambitions for Greenland that would avoid tariffs. 

Trump said late Wednesday that the United States and the North Atlantic Treaty Organization (NATO) had "formed the framework of a future deal with respect to Greenland" and that he will not be imposing tariffs scheduled to go into effect in February, per Reuters. The US President did not detail the parameters of the “framework,” and it was unclear what the agreement entails. 

However, optimism after Trump stepped back from threats to impose tariffs on eight European countries could lift the Greenback against the JPY in the near term. 

The final reading of US Gross Domestic Product (GDP) for the third quarter (Q3) will be published later on Thursday, along with the weekly Initial Jobless Claims and Personal Consumption Expenditures (PCE) Price Index data. If the reports show stronger-than-expected outcomes, this could provide some support to the USD against the JPY. 

The Bank of Japan (BoJ) is widely anticipated to hold its policy rate steady at around 0.75% at the conclusion of its two-day meeting on Friday. The Japanese central bank last raised its rate to the highest in three decades in December 2025. 

Traders await additional clues from Governor Kazuo Ueda's press conference regarding the expected timing of the BoJ's next rate hike. Any hawkish remarks from Japanese policymakers could boost the JPY and create a headwind for the pair.