Upside Targets And Momentum
If USD/JPY closes above 159.00, it may test 159.50 and then 160.00. Possible intervention by Japanese authorities could limit movement and lead to range trading. Support is first seen at the 20-day SMA of 158.10. If that breaks, levels to watch are 157.50, 157.00, the March 5 low at 156.45, and the 100-day SMA at 156.20. We remember looking at similar bullish forecasts back in mid-2025, when the dollar was pushing aggressively towards the 160 level. The feared intervention from Japanese authorities did materialize, with coordinated selling seen in late September and October 2025 that drove the pair sharply back below 152. That historical action established a firm ceiling that the market has been hesitant to retest. Today, the interest rate differential remains the dominant factor, with the US Federal Reserve holding rates steady while the Bank of Japan has only just begun its slow pivot away from ultra-loose policy. February 2026 inflation data from the U.S. showed a resilient 3.3% core reading, suggesting rate cuts are not imminent. This fundamental pressure is once again pushing USD/JPY higher, currently trading around the 158.50 mark.Options Strategies For The Weeks Ahead
For the coming weeks, traders should consider buying call options with strike prices at 159.50 and 160.00, targeting expirations in late April 2026. This strategy allows for participation in further upside while defining risk, should Japanese officials decide to intervene again. The memory of the 2025 intervention is keeping implied volatility somewhat elevated, making these options a prudent way to express a bullish view. Conversely, protection against another surprise intervention is warranted. Purchasing put options with a 157.00 strike can serve as an effective hedge for existing long positions. Given that the Ministry of Finance has spent over ¥9 trillion on intervention in the past, traders should not get complacent as we approach the psychological 160.00 level. Create your live VT Markets account and start trading now.
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