The USDJPY has reached an intraday high of 150.79, breaking the previous swing high of 150.48 from April 3. This shows a strong upward trend. The next target zone is between 151.198 and 151.33, followed by a key level at 151.616, which is the 61.8% retracement of the 2025 decline. Earlier, the pair moved above the 200-day moving average at 149.53 and the 50% midpoint of the 2025 trading range at 149.375. These levels are now important support zones, with prices comfortably above them. This indicates strong upward momentum, with buyers firmly in control.

Divergence In Central Bank Policy

The recent surge in USDJPY above 150.50 is largely due to differing central bank policies. The US Federal Reserve’s recent statements indicate a hawkish approach, while the Bank of Japan has confirmed its commitment to accommodative policies just two weeks ago. This difference suggests that the path ahead for the USDJPY is likely to continue upward. For derivatives traders, buying call options is a direct way to take advantage of this bullish movement. There has been a noticeable rise in open interest for call options set for August and September, particularly at strike prices of 151.50 and 152.00. This strategy allows traders to profit from a price increase while limiting their maximum risk. However, we should keep in mind the sharp reversals from late 2022, when the Japanese Ministry of Finance intervened to support the yen near the 151.90 level. As we near the target zone between 151.20 and 151.60, the likelihood of either verbal or direct intervention rises significantly. Traders should brace for increased volatility and sudden price pullbacks.

Reinforced Bullish View

Recent data supports our bullish outlook. The US Non-Farm Payrolls report from early July 2025 showed an impressive addition of 250,000 jobs. In contrast, Japan’s recent Q2 GDP figures indicated a slight contraction, giving the authorities little reason to shift away from their weak yen strategy. Implied volatility in the options market has already increased by 15% this month, making strategies like bull call spreads wise for managing rising option premiums. Our positive outlook persists as long as the price stays above the support zone between 149.37 and 149.53. A drop below this area, which includes the 200-day moving average, would signal that the strong upward trend is weakening. For now, these levels provide a solid base for the current rally. Create your live VT Markets account and start trading now.

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