The Japanese Yen is stable against the US Dollar, with the USD/JPY pair steady at around 154.00. Earlier, it touched a nine-month peak near 154.50 but fell back after weak employment numbers in the US. Recent reports from ADP show that the US lost 11,250 private-sector jobs over the last four weeks, down from 14,250 previously. This weaker job market raises the chances that the Federal Reserve will ease monetary policy soon.

US Dollar Index Declines

The US Dollar Index has dropped to about 99.40, a two-week low, after five straight days of decline. Markets now predict a 70% chance of an interest rate cut in December, up from 62%. In Japan, Economy Minister Yoshitaka Kiuchi voiced worries about the Yen’s weakness and its effects on inflation. The government aims for wage growth that outpaces inflation and plans a stimulus package set for November 21 to boost the economy. A key adviser to the Prime Minister suggested that the Bank of Japan should avoid raising interest rates this year, to support Japan’s recovery. Currently, the Yen is strongest against the Australian Dollar. We’re seeing a clear pause in USD/JPY around the 154.00 mark. The weak US job data is applying pressure on the dollar, while the Bank of Japan’s reluctance to change its policy is keeping the Yen from gaining strength. This situation indicates that making strong directional bets now is risky.

Indicators of a Slowdown in the US Economy

The signs of a slowing US economy are increasingly hard to overlook, making a December rate cut from the Federal Reserve more likely. In addition to the recent ADP data, the Bureau of Labor Statistics reported on November 7, 2025, that only 85,000 jobs were created, falling well short of what was expected. This strengthens the case for dollar weakness and may limit any significant upward movements in USD/JPY. Japanese officials are clearly getting more uneasy about the Yen’s weakness, as it drives inflation and affects consumers. The Tokyo Core CPI for October, a key indicator, stayed high at 2.8%, increasing pressure on the government to intervene. All eyes will be on the stimulus package due on November 21 for hints about future policy. Given the uncertainty, traders might consider using options to take advantage of potential price swings instead of guessing the direction. Buying a straddle, which means purchasing both a call and a put option at the same strike price, could be a smart move. This strategy profits if the pair has a significant breakout in either direction after the Fed makes its decision or Japan announces its stimulus. The current levels above 154.00 also raise the chances of direct currency intervention from Japanese officials. We have seen similar situations before, especially in the fall of 2022, when the Ministry of Finance intervened to support the Yen as it broke through important psychological levels. Therefore, buying out-of-the-money puts could act as a relatively inexpensive insurance against a sudden drop in the pair. Create your live VT Markets account and start trading now.

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