USD/JPY has fallen for four straight days and is trading just under 153.00 in the Asian session, near a two-week low. The weekly downtrend followed Japanese Prime Minister Sanae Takaichi’s landslide election win.
Markets expect the Bank of Japan to keep a path towards further rate rises, which supports the yen. The US dollar is also weighed down by expectations of further Federal Reserve rate cuts in 2026 and by concerns about the bank’s independence.
Key Levels And Trend
Price is holding just above the 200-day EMA at 152.50. Nearby support sits at the 38.2% Fibonacci retracement of the 140.02–159.35 move, around 152.00–151.95, with a close below opening the 50% retracement at 149.68.
MACD has the MACD line below the signal line and below zero, while the negative histogram is widening. RSI is 36 and falling, pointing to ongoing downside momentum.
If the pair holds above the 38.2% retracement and moves back above the 200-day EMA, selling pressure may ease. A sustained break below the 200-day EMA would leave the pair more exposed to further declines.
We are seeing the USD/JPY pair remain under pressure, struggling below the 153.00 level for several days now. The fundamental outlook continues to favor a stronger yen, driven by expectations of more rate hikes from the Bank of Japan. This sentiment was largely set in motion after the landslide election victory of Prime Minister Takaichi back in 2025.
From our perspective as traders, the critical level to watch is the 200-day moving average, currently around 152.50. A decisive break and close below this support could trigger a significant downward move. For those with a bearish view, buying put options with a strike price near 152.00 would be a prudent way to position for a potential slide towards the 149.70 area.
Options Strategy And Volatility
If this support zone between 152.00 and 152.50 holds firm, the downward momentum could stall. In this scenario, selling out-of-the-money puts or establishing a bull put spread could be a strategy to collect premium, betting that the floor will not collapse. However, given the strong bearish signals from indicators like the MACD, any rallies are likely to be short-lived selling opportunities.
We must also remember the sharp moves we witnessed in this pair during late 2022, when it fell dramatically on policy shifts. The current setup echoes that period, suggesting that a break of long-term support could lead to increased volatility. This makes options strategies with defined risk particularly attractive compared to trading spot or futures directly.
