Nomura Research adopts a cautious bias on USD/JPY and likes long CHF/JPY position instead.

"At the G7 Finance Ministers and Central Bank Governors Meeting on 18-19 May, with the focus on Treasury Secretary Bessent’s stance on Japan’s currency and monetary policy . It is currently unconfirmed whether Governor Ueda will attend, but as global bond yields come under upward pressure, market attention is likely to increase if a meeting between Treasury Secretary Bessent and Governor Ueda is arranged. If BOJ board member Koeda signals a positive stance toward a June rate hike in her speech on Thursday, it might provide some support to JPY,  because of the view that a majority support a June hike at the moment," Nomura notes.

"Unless there is a clear improvement in the Middle East situation, the main scenario for USD/JPY is to remain elevated, though caution is warranted regarding sporadic risks of a sharp JPY surge. We will avoid trading USD/JPY for now, recommending CHF/JPY long positions," Nomura adds.