Insights 
VT 
Japanese Yen Performance
The Japanese Yen has shown strength against other major currencies, notably outperforming the Swiss Franc. A heat map illustrates the percentage changes of currencies against one another, using a base currency from the left column and a quote currency from the top row. The Japanese Yen’s change against the US Dollar is highlighted, showcasing recent market movements.
We are watching the USD/JPY trade in a tight range around 150.60, as the market waits for clear signals. The ongoing US government shutdown and the Fed’s pre-meeting blackout period are keeping volatility suppressed for now. This quiet period offers a chance to plan for the next significant move.
For those expecting a move higher, we see the 151.20 level as the critical trigger for a bullish breakout. A good derivative play would be buying call options or setting up bull call spreads with a strike price above 151.20 to target the 152.00 zone. This view is supported by the last US CPI reading of 3.9% before the shutdown, suggesting the Fed has little reason to turn dovish.
Conversely, a drop below the psychological 150.00 mark could signal that sellers are taking control, opening the door for a deeper pullback. We should consider buying put options to protect against a slide toward 148.57, especially given the high risk of intervention from Japanese authorities. We saw similar official action back in late 2022 when the pair last traded persistently above 150.
Current Market Condition
We note that the current range-bound price action has likely dampened short-term implied volatility, making options relatively inexpensive. This presents an opportunity to position for a larger move once the government shutdown ends and economic data resumes. Historically, prolonged shutdowns, like the one we saw in 2018-2019, eventually lead to spikes in market volatility as uncertainty builds.
While the immediate focus is on technical levels, we must also watch the mixed signals from other markets. Persistently low oil prices below $57 a barrel suggest underlying global demand weakness, which could challenge the current risk-on sentiment. This divergence highlights the need for cautious positioning, as the macro picture remains clouded by the lack of fresh US data.
