[Dollar/Yen moves into an era of "range" rather than "direction," survival in the current market is what matters most]

【USD/JPY moves from a “direction” era to a “volatility” era; in the current market, survival is more important】

The current USD/JPY market is maintaining a high level but beginning to shift toward noticeably different price movement. Previously it was a very clear trend market where “buy the dips.” Now, even in the same uptrend, intra-move swings have become quite wild, with more instances of sharp up and down moves in short periods.

In other words, the current USD/JPY is a “strong market” but no longer a “simple market.”

The backdrop is, again, the vigilance toward intervention by Japanese authorities. In the market, around the 160 level remains strongly in focus, and there is a sense that “an intervention to buy yen could come at any time” at this level. As a result, participants who actively buy at high levels have decreased compared to before, making sustained upward momentum harder.

On the other hand, the dollar itself remains solid. Inflation in the United States has not fully cooled, and the Fed remains cautious about aggressive rate cuts. Consequently, U.S. interest rates tend to stay high, and from the perspective of the U.S.-Japan rate differential, the environment continues to support the dollar/yen.

That is, the current USD/JPY is a structure where it cannot drop all the way, yet it does not keep extending in one direction indefinitely—a very challenging market structure.

Furthermore, Middle East tensions and movements in crude oil prices are making markets unstable. If crude oil prices rise, resource-importing countries like Japan tend to view it as yen-selling material. However, geopolitical risk can also heighten risk aversion and trigger yen buying, so the market reaction to the same news is not consistent.

Additionally, expectations for the Bank of Japan are complicating outlooks. While policy rates are held steady, markets still have a sense that “there could be an additional rate increase.” However, given economic considerations and caution toward external conditions, the possibility of a rapid tightening is not high.

This mix of “expectation” and “cautious stance” is one of the factors making the USD/JPY moves more volatile today.

What individual investors should pay attention to in such an environment is not so much guessing “which direction it will move,” but more about “surviving the abrupt swings.”

Recent markets have shown more rapid moves like sharp rises followed by sharp drops and then renewed gains, rather than simply trending upward. Therefore, rather than holding positions for long with hopes of large profits, there are more moments where quickly accumulating small profits fits the situation better.

Especially in the early hours of the London and New York sessions, the flow can change rapidly, bringing both opportunities and higher risks. Now, a flexible stance of “take what you can” rather than “take everything” is important.

The current USD/JPY is less about a pure sense of direction and more about tolerance for volatility. Therefore, at this time focusing not only on winning rate but also on “not taking large losses” will likely lead to more stable trading outcomes.