Synopsis:

Nomura’s time-zone analysis suggests that USD/JPY has been trading more resiliently during Asian sessions, likely due to onshore FX demand from Japanese importers and retail investors. This could provide dip-buying support for the pair, even as BoJ rate hike expectations limit the upside.

Key Points:

1️⃣ USD/JPY Strength During Asian Trading Sessions 📈

• Time-zone analysis shows that USD/JPY has tended to rise during Asian hours in 2025.
• Likely driven by onshore Japanese FX flows, particularly from importers and retail investors.

2️⃣ Japanese Importers May Be Buying USD/JPY 💴

• Japanese firms’ assumed USD/JPY level for FY2024 H2 is lower than current levels, suggesting they are buying dips to hedge imports.

3️⃣ Retail Investors Also Supporting USD/JPY 🏦

• NISA account inflows into foreign equities have been substantial, increasing JPY selling.

4️⃣ US Tariff Headlines Driving Demand for USD 💡

• Many US tariff headlines emerge during Asian hours, boosting USD demand.

5️⃣ BoJ Rate Hike Expectations Capping Upside 🏦

• While yen-selling flows may support USD/JPY, potential BoJ rate hikes could limit further gains.

Conclusion:

Despite expectations for tighter BoJ policy, onshore demand from importers and retail investors appears to be propping up USD/JPY around 150. This suggests that dips in the pair may continue to be bought in the near term, limiting downside risks even amid broader JPY strength themes.