Aug 27 (Reuters) - FX traders can use a simple option to cover near-term USD/JPY gains, as technical signals point to gains.

USD/JPY remains buoyant after finding support last week at the 158.03 Fibonacci level, a 38.2% retrace of the 155.20-159.78 (EBS) rise. There is scope for an eventual break above the July 18 159.78 peak, once the kijun line at 159.60 - the midpoint of the last 26 trading sessions - is broken. Earlier on Thursday, BOJ Deputy Governor Ryozo Himino said timely rate hikes would help avoid an inflation spike that could force abrupt tightening later, but stopped short of signalling an imminent rate hike. USD/JPY has steadily drifted higher since FX traders wanting to insure against a USD/JPY rise could buy a one-week 159.60 USD call option at a cost of 38 pips, priced with spot at 159.42. Profit potential is unlimited if spot is above the 159.98 break-even point at the Sept. 3 expiry. Losses are limited to the 38 pips premium paid.
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(USD/JPY Martin Miller is a Reuters market analyst. The views expressed are his own)