The US Dollar (USD) might rise above 155.00 against the Japanese Yen (JPY), but significant gains beyond this point seem unlikely. Analysts from the UOB Group see an upward trend for the USD, but any advances might be limited around 155.55. Recently, the USD hit a high of 155.04, dropped sharply to 154.11, and then rebounded. Though it could reach 155.00 again, the weak upward momentum suggests that further increases are unlikely. Support levels are set at 154.30 and 154.10.

Expectations for the USD/JPY

In the next few weeks, it’s expected that the USD will continue to trend upward. However, any rise may be limited due to weak momentum, with gains likely capped near 155.55. If the USD falls below 153.95, it would indicate a decrease in upward momentum. This analysis comes from the FXStreet Insights Team, made up of journalists gathering insights from market experts. Their reports include information from commercial sources as well as internal and external analysts. Given the outlook for a slight upward trend in USD/JPY, we should consider strategies that can take advantage of moderate price increases. The difference in interest rates is a key factor, especially since US inflation data from October 2025 showed a stable 3.4%, while the Bank of Japan continues its supportive policy. This economic backdrop supports slow gains for the US dollar against the yen. For the upcoming weeks, a bull call spread is a suitable strategy, as it fits with the expectation of limited growth. We could buy a call option with a strike price around 154.50 and sell another call at 155.50 to fund our position. This method allows us to profit if the pair climbs higher, while the sold call limits our profits, reflecting the belief that a significant rise is unlikely.

Options Strategies for Trading USD/JPY

On the other hand, selling put options or creating a put credit spread could work well, taking advantage of the solid support level at 153.95. Selling a put option with a strike price near 154.00 would let us collect premium, earning profits as long as the currency pair stays above that level. The current one-month implied volatility for USD/JPY is low at 8.5%, making this an appealing strategy for generating income if we think the downside is secure. We should also keep historical context in mind, as these levels have led to action from Japanese authorities in the past. Looking back at interventions in 2022, along with frequent warnings in 2023 and 2024, the likelihood of official intervention rises if the pair goes above 155.00. This historical context suggests that any rally may be limited, making defined-risk options strategies a more sensible choice than simply holding a long position. Create your live VT Markets account and start trading now.

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