The USD/JPY has seen resistance at the top of an ascending channel around 159.45. A short-term pullback might find support at the 50-day moving average, between 156.00 and 156.60.
If this moving average is maintained, the upward trend may persist. Opportunities beyond 159.45 could reach projections of 160.70 and a potential peak near 162 in 2024.
Société Générale’s FX Analysts Insights
This information stems from Société Générale’s FX analysts. It is included in reports selected by the FXStreet Insights Team, which compiles observations from various experts.
We’ve seen USD/JPY run into resistance at the top of its channel near 159.45, creating a pause in its ascent. A pullback from here seems possible, with a crucial support zone for us to watch being the 50-day moving average around 156.00-156.60. How the pair reacts at this level will likely set the tone for the next several weeks.
This technical pressure is happening as the fundamental story strengthens the dollar, especially after US CPI data for December 2025 surprised by coming in at 3.2%, above market forecasts. In contrast, the Bank of Japan held its policy steady in its meeting earlier this week, disappointing anyone hoping for a more aggressive stance to support the yen. This growing policy divergence continues to be the primary driver of this market.
Strategy for Derivatives Traders
For derivatives traders, if we see the 156.00-156.60 support area hold firm, buying call options could be an effective strategy to capitalize on the next move higher. Implied volatility is not as high as it was during the intervention periods of 2024, making option premiums reasonable for a defined-risk trade. A bounce from this moving average would signal that the uptrend remains firmly intact.
Should the pair instead break decisively above the 159.45 resistance, we would look towards higher targets at 160.70 and even the 2024 peak near 162, a level that was not challenged during all of 2025. A breakout strategy could involve using call spreads to target these higher levels while managing costs. The market is clearly testing the resolve of Japanese authorities, who have been notably quieter on the intervention front so far this year.
