The USDJPY pair is currently stabilizing near a resistance zone after the US Consumer Price Index (CPI) data came out as expected. This news did not alter market predictions. Right now, the market anticipates 60 basis points of rate cuts by the end of the year, up slightly from 57 before the CPI report. This rise suggests a strong belief in a rate cut happening in September. The chance for a September rate cut is high, but if the Non-Farm Payroll (NFP) report is strong, expectations might shift a bit. The next important event to look out for is Fed Chair Powell’s speech at the Jackson Hole Symposium. The Japanese yen is increasing in value because traders expect the US Federal Reserve to be dovish.

Technical Analysis Of USDJPY

From a technical perspective, the daily chart shows USDJPY hovering around the 148.00 level. Sellers are cautious of the 148.50 area. On the 4-hour chart, the pair is stabilizing and rejecting resistance levels, with possible downward movement towards the key trendline at 144.50. The 1-hour chart indicates ongoing bearish pressure, and breaking below 147.58 could lead to further declines. Upcoming US data like the Producer Price Index (PPI), Jobless Claims, Retail Sales, and Consumer Sentiment will play a crucial role in moving USDJPY. All eyes will also be on communications from the Federal Reserve after the CPI data release. As of August 13, 2025, USD/JPY is still around 148.00. The recent US inflation report for July 2025 showed a rate of 3.1%, which wasn’t enough to shake the market’s belief that the Federal Reserve would cut interest rates next month. Market indicators suggest there is over an 85% chance of a September rate cut, preventing the dollar from rising.

Options And Market Strategies

In this scenario, traders dealing in derivatives might want to consider strategies that would benefit from either a stable range or a sudden movement after the Jackson Hole symposium later this month. Given the strong likelihood of an interest rate cut by the Fed, we expect the USDJPY pair may trend downwards. There is consensus that the US economy is slowing down, as the last Non-Farm Payrolls report from early August 2025 showed job growth easing to 185,000. For those believing the dollar will weaken, purchasing put options on USD/JPY with a September or October 2025 expiration seems like a smart choice. This approach allows us to target a dip towards the 144.50 trendline while limiting our risk. A strike price around 147.00 would take advantage of an anticipated decline following a break below the recent low of 147.58. Conversely, if Fed Chair Powell adopts a more hawkish tone at Jackson Hole, we could see a sharp rise. Traders expecting a breakout above the 148.50 resistance may consider buying call options with a 149.00 strike price. However, it’s essential to recall the Ministry of Finance’s intervention back in late 2022 when the pair rose above 150, making a sustained move toward 151.00 a risky prospect. The strength of the yen also hinges on Japan’s economic data. Japan’s core inflation has remained steady at around 2.5%, a level that could prompt the Bank of Japan to rethink its ultra-loose monetary policy. Any new data indicating rising inflation could quicken a decline in USD/JPY, regardless of the Fed’s direction. With uncertainty leading up to Jackson Hole, a strategy focusing on volatility might be the best way to proceed. A long strangle, which involves buying both an out-of-the-money put and an out-of-the-money call option, would allow us to profit from a significant price swing in either direction, without needing to predict the outcome of Powell’s speech accurately. Create your live VT Markets account and start trading now.

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