Insights 
VT 
Short-Term USD Surge
Analysts from UOB Group suggest that further strength of the US Dollar (USD) against the Japanese Yen (JPY) is probable. They indicate a level of 153.80 as a benchmark for potential USD gains in the longer term.
In the short term, there was a USD surge, reaching a high of 152.04, surpassing expectations of a high range between 149.70 and 150.70. Analysts suggest that despite current overbought conditions, the momentum might still push the USD above 153.00 today, with support seen at 151.80 and 151.30.
Over the next one to three weeks, previous analysis anticipated USD rising to test resistance between 150.90 and 151.20 but the currency exceeded this zone swiftly. With strong support predicted at 150.50, expectations are for more USD strength, especially if it surpasses 153.80.
It is suggested to maintain a positive outlook on USD as long as the potential for further gains remains amid current market conditions. This analysis is provided by FXStreet Insights Team, who consolidate various market observations from experts.
Strategic Considerations
We see the recent surge in USD/JPY as a sign of continued strength, suggesting further upside is likely in the coming weeks. The impulsive momentum appears strong enough to overcome the current overbought conditions. This environment favors strategies that profit from a rising dollar against the yen.
Considering the key level of 153.80, buying call options with strike prices at or above 153.00 could be a viable strategy. This view is supported by the latest US inflation data from September 2025, which showed core CPI stubbornly high at 3.1%, reinforcing expectations that the Federal Reserve will maintain its restrictive policy stance. The ongoing policy divergence with the Bank of Japan, which remains hesitant to tighten significantly, provides a strong fundamental tailwind.
The critical support level to watch is 150.50, and a break below this would invalidate our current bullish outlook. Traders should use this level as a guide for placing stop-losses or for considering put options as a hedge. We must also remember the sharp interventions by Japanese authorities back in late 2022 when the pair last traded in this territory, which adds a layer of event risk to any long positions.
The potential for intervention as we approach the mid-150s could also lead to a spike in implied volatility. This suggests that traders who anticipate a large price move, but are uncertain of the direction, could explore strategies like long straddles. Any official commentary from the Ministry of Finance will be crucial in the coming days.
