The USD/JPY has surpassed a descending trendline after consolidating near 149. This suggests potential growth toward the 155.40–156.50 levels, according to Société Générale’s FX analysts.
Movement And Projections
The USD/JPY’s movement within a brief consolidation phase managed to hold its position around the previous gap levels near 149. By breaking out above this range and surpassing a multi-month descending trendline, it indicates a continuation of the upward trend.
Future projections suggest a gradual increase, aiming for the 155.40 to 156.50 range. The recent pivot low of 151.50 is expected to act as short-term support.
Given the break above the multi-month descending trendline, we see a clear signal that the upward move in USD/JPY is set to continue. This technical picture is strongly supported by the widening policy divergence between a hawkish Federal Reserve and an accommodative Bank of Japan. For the coming weeks, we should position for further dollar strength against the yen.
This view is reinforced by recent US inflation data for October 2025, which came in at 3.4%, prompting Fed officials to reiterate their “higher for longer” stance into mid-2026. In contrast, Japan’s GDP contracted by 0.2% last quarter, making it highly unlikely the Bank of Japan will pursue any meaningful monetary tightening. This fundamental backdrop provides sustained fuel for the pair’s rally.
Trading Strategies And Risk
In response, we should consider buying call options with strike prices aiming for the 155.40 target. Expiries in December 2025 and January 2026 offer a good balance of time value and responsiveness to the expected move. The recent pivot low of 151.50 serves as a crucial short-term support level, which can be used as a reference for structuring trades or setting alerts.
The derivatives market is already reflecting this sentiment, as one-month risk reversals show a notable 1.1% premium for USD/JPY calls over puts. This indicates strong market demand for upside exposure. Selling out-of-the-money put spreads with strikes below the 150.00 level could be another strategy to collect premium while maintaining a bullish bias.
We must, however, be mindful of history, remembering the multiple interventions by Japan’s Ministry of Finance as the pair approached the 160 level during 2024. While the fundamental case for a higher USD/JPY is strong, the risk of sudden official action could cap gains or introduce sharp volatility. Using defined-risk structures like call spreads is a prudent way to target the 156.50 projection while protecting against such events.
