The US Dollar (USD) may continue to drop in value against the Japanese Yen (JPY), with a target of 146.60. Although the USD has seen a significant decline, it’s not likely to fall below 145.80. In recent trading, the USD dropped sharply, closing down 2.24% at 147.36. This follows a high of 150.91 and raises questions about whether the USD will keep declining, especially since it is currently oversold. This recent drop opened up possibilities for further declines, but we expect the support level at 145.80 to hold. On the other hand, if the USD rises above 149.50, it could mean the downward trend is slowing down. Statements about future market conditions come with risks and uncertainties. The information provided here is meant for informational purposes only and not as financial advice. Trading in financial markets carries significant risks, including the possibility of losing all your investment. Thorough research and understanding of risk are essential before participating. Proper risk management is vital in forex trading to avoid losses greater than initial investments. As of August 4, 2025, the US Dollar has weakened significantly against the Japanese Yen. The quick drop to 147.36 suggests that we might see further declines in the weeks ahead, with a focus on reaching the 146.60 level. This perspective is supported by recent US economic data. The July 2025 jobs report, released last Friday, indicated a bigger-than-expected slowdown in hiring. This has led to speculation that the Federal Reserve will keep interest rates steady this fall, contrasting with the hawkish approach earlier this year. At the same time, Bank of Japan officials have been vocal about yen weakness, with comments hinting at potential policy changes before 2026. This is the most decisive language we’ve heard about possible intervention or moving away from their very loose monetary policy. The market is now considering a higher chance of action to strengthen the yen. For traders dealing in derivatives, this outlook suggests preparing for a further but controlled decline in USD/JPY. Buying put options with strike prices around 147.00 could offer a straightforward way to benefit from a move toward our 146.60 target. This strategy has a defined risk, limited to the premium paid for the options. To reduce costs, traders might consider bear put spreads. For instance, a trader could buy a 147.00 strike put while selling a 145.80 strike put, creating a position that profits from a decline but caps gains at the strong support level. This aligns with the belief that the pair is unlikely to fall below the 145.80 support in the near future. We’ve seen similar price actions before, especially in late 2022. After the USD/JPY rate went above 150, Japanese authorities intervened to strengthen their currency, leading to a sharp reversal. The recent decline from above 150 feels familiar and suggests renewed concern from officials. However, we need to stay disciplined and watch the 149.50 level closely. If the dollar rises above that point, it would contradict our current bearish outlook. Such a move would indicate that the downward pressure is lessening, and we would need to reassess our strategies.

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