This is via eFX:
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:
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.
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.
Retail Investors Also Supporting USD/JPY
• NISA account inflows into foreign equities have
been substantial, increasing JPY selling.
US Tariff Headlines Driving Demand for USD
• Many US tariff headlines emerge during Asian
hours, boosting USD demand.
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.
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If you are wondering what is NISA …
NISA (Nippon Individual Savings Account) inflows refer to the money being invested into tax-advantaged investment accounts in Japan, similar to Roth IRAs in the U.S. or ISAs in the U.K.
- NISA is a government-backed investment scheme that allows individuals in Japan to invest in stocks, ETFs, and mutual funds with tax-free gains and dividends for a set period.
- It was introduced to encourage long-term investing among Japanese households.
