USD/JPY fell 0.95% on Tuesday, bringing the two-day decline to 2.3% from peak to trough. Traders are positioning ahead of Wednesday’s US Non-Farm Payrolls (NFP) release.
On the daily chart, the pair is still choppy and stuck in a range. The top is the January high near 159.450, and the bottom is the late-January low at 152.100. It closed Monday at 154.410, down 1.47 yen (0.94%). An early gap higher faded after comments from Finance Minister Katayama and currency official Mimura about responding to yen volatility.
Technical Picture And Key Levels
Monday printed a bearish engulfing candle and pushed below the 50-day Exponential Moving Average (EMA) at 155.800. The 200 EMA at 151.920 is still rising and remains the main longer-term support.
The Stochastic Oscillator (14, 5, 5) is near the midpoint and trending lower. Key support sits at 154.00, then 153.00 to 153.50, and then 151.920. Resistance is at 155.80, followed by the 157.00 to 157.500 zone.
Wednesday’s delayed January NFP is expected at 70K versus December’s 50K. Unemployment is seen at 4.4%, and an annual benchmark revision is also due. Three Fed speakers (Schmid, Bowman, Hammack) are scheduled for Wednesday, and Japan’s Q4 GDP is due later in the week.
Looking back at the volatility in early 2025, the market was already preparing for a major policy shift. The verbal interventions after Prime Minister Takaichi’s election signaled that Japanese officials viewed 159 as a hard limit. That area capped price for the rest of last year, training traders to sell rallies near that zone.
Now, on February 11, 2026, the backdrop has changed, but those levels still matter. The Federal Reserve started cutting rates in the second half of 2025, which has steadily narrowed the rate gap between the U.S. and Japan. Even so, recent U.S. data has remained strong. The January 2026 NFP report showed a standout 295,000 jobs added, which makes the Fed’s next steps less clear.
Policy Shift And Trade Implications
The biggest change came from the Bank of Japan. In November 2025, it finally ended negative interest rates, a shift that has changed long-term sentiment for the yen. Combined with the Fed’s easing cycle, this creates a structural headwind for USD/JPY. As a result, traders may treat rallies toward the 153–155 area as potential selling opportunities.
With that in mind, derivatives traders may prefer strategies built for range trading or a slow grind lower, rather than a sudden selloff. Selling out-of-the-money call options, or using bear call spreads with strikes above 155, can collect premium while keeping risk defined in case U.S. data surprises to the upside. Implied volatility is still high compared with historical averages, which supports premium-selling approaches.
It is also important to remember that the rate differential still favors the dollar. That makes it costly to hold outright short USD/JPY positions because of negative carry. Options can express a bearish-to-neutral view while helping manage carry costs and benefit from time decay. Use the resistance zones established in 2025 as a guide when structuring trades in the weeks ahead.
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