Nomura’s time-zone analysis for USD/JPY

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.

This article was written by Eamonn Sheridan at www.forexlive.com.