[The USD/JPY is around 159 yen, nerves are taut; what matters now is not whether it will go up or down, but the sustainability of the factors.]

【USD/JPY Nervous around ¥159, what matters now is the durability of the catalysts, not which way it goes】

In the current FX market, USD/JPY isaround ¥158.9 to ¥159and remains in a high, nervous range. According to Reuters, as of April 21 the yen had weakened to around¥158.81 per dollarat the time, but at the same time, peace expectations surrounding the Iran situation were in the market, and for the dollar overall there were scenes of a somewhat heavier bid. In other words, USD/JPY now is in a very delicate phase where the yen’s depreciation trend continues, but even a slight easing of geopolitical risk could dampen dollar buying.

What to watch in this phase is the upcomingApril 27–28 BOJ monetary policy meeting情報として複数の関係筋情報としてロイターは、日銀が4月会合では利上げを見送り、政策金利を0.75%で維持する公算が大きいと報じています。Background shows that extended Middle East war drives higher energy costs, creating uncertainty about Japan’s economy and production. Nevertheless, the BOJ has not completely abandoned a tightening stance, and markets continue to price ina June rate hike possibility continues to be considered.

In fact, household inflation expectations remain high. The BOJ survey shows that households expect prices to rise one year ahead by 83.7%, and five years ahead by 82.6%, with a high average expected rate. Looking at prices alone, there remains a case for continued rate hikes for the BOJ, but the risk of economic slowdown due to war and higher oil adds more uncertainty. It’s a delicate balance: it’s hard to allow yen depreciation, but it’s also hard to cool the economy too much.

In the United States, the environment isn’t one where selling the dollar would quickly take hold. The Fed’s March 18 statement saidInflation remains somewhat elevated and the economic outlook is highly uncertain, and the impact of Middle East tensions on the US economy remains unclear. FOMC participants’ projections show inflation risk skewed to the upside, making an immediate major easing in US policy unlikely. As a result, the US–Japan interest-rate differential continues to support the dollar/yen, and a decisive move toward a strong yen remains insufficient at this time.

In this environment, what individual investors should focus on isnot the direction but how long the influential catalysts last. If Middle East tensions worsen, dollar buying could rekindle; conversely, prospects for peace could ease dollar strength. Moreover, as the BOJ meeting nears, expectations for policy moves can cause volatility. Rather than chasing highs, it may be more sensible to focus on time periods with wider trading ranges in London early or New York early, and trade by watching the quality and durability of the news.