Bank of America Global Research discusses the relation between Nikkei and the JPY.

"Since last year, equity markets have shown relative strength in the order of Japan, the US, and Europe, while FX markets have shown the reverse. In FX, concerns over central bank independence and fiscal sustainability are weighing on both JPY and USD. Structural outflows from Japan also remains a source of yen weakness," BofA notes.

"In this context, June will be critical for three reasons. (1) Whether the Strait of Hormuz reopens before materially impacting Japan's manufacturing sector. (2) Whether the Bank of Japan proceeds with a rate hike at the June meeting while reinforcing its independence. (3) Whether the government's annual policy framework (Honebuto Hoshin) can restore confidence in fiscal policy without undermining growth expectations. At present, however, the bar for all three conditions to be met looks high," BofA adds.