[USDJPY cannot be assured even with “BOJ pass-through”; next questions focus on expectations for June and the weight of rising oil prices]

【The Dollar/Yen cannot be relied on even with the Bank of Japan’s passage, what will be questioned next is the expectations for June and the weight of crude oil】

In the current foreign exchange market, USD/JPY remains at a level that is easy to focus on the high end, but the market’s focus is already shifting from “how the April BOJ meeting went through” to “how to price in what comes next.” The Bank of Japan, at its monetary policy meeting on April 28, left the short-term policy interest rate at0.75%. However, this time it was not merely a hold;three of the nine Policy Board members voted against, advocating a hike to 1.0%— a highly unusual move. This shows that within the BOJ, voices are growing that are more conscious of inflation risks and the impact of higher crude oil prices.

Governor Kuroda, at the press conference, also acknowledged that uncertainties surrounding the Middle East are large, and thatthere is a possibility that prices in fiscal year 2026 could rise above 2%due to higher crude oil prices. On the other hand, there is also the view that underlying inflation is still below target but gradually rising, and going forward, if corporate price pass-through and inflation expectations pick up, the BOJ will need to act so as not to fall behind. From the market’s perspective, even if the policy rate is kept unchanged in April,it did not completely erase expectations for further rate hikes after June, it seems fair to say.

Meanwhile, there are still reasons supporting USD/JPY. According to Reuters, although the split voting result at the BOJ temporarily led to yen buying, later, as Governor Kuroda noted the risk of a slowdown in the economy, the yen did not rise further and the market returned to an unstable path. Additionally, in the risk-off environment surrounding the Middle East, the dollar tends to be bought, and crude oil prices remain high. This makes the yen vulnerable to both higher import costs and inflation, so it is not a straightforward factor for the currency market in Japan.

The U.S. side is not in a rush to sell the dollar either. In the March 18 statement, the Fed noted thatinflation remains somewhat elevated and uncertainty about the economic outlook is high, and that the impact of Middle East events on the U.S. economy is unclear. Additionally, the March meeting outlook suggestedinflation risks are skewed higher, making it hard to see the United States quickly turning significantly dovish. As a result, the structure of the U.S.-Japan interest rate gap still supports USD/JPY, and there is a lack of a decisive factor for a strong yen.

In this environment, what individual investors should focus on isnot “buy because the BOJ kept rates unchanged” or “sell because rate hike expectations remain,” but rather how long those factors persist. Right now, USD/JPY moves quickly when trends rise, and also quickly when they fall. Rather than mechanically chasing high levels, it is most important to narrow to times with larger price movement potential, such as early London or early New York sessions, and respond by evaluating not only the strength of the news but its sustainability.