JPY: The recent announcement of a higher-than-expected US reciprocal tariff on both China and Japan triggered JPY strength today. Despite the recent softening of US equity prices, President Trump’s decision to implement these higher-than-anticipated tariffs suggests the so-called “Trump Put” is unlikely to provide any immediate support.
CFTC’s data suggest room for a short-term rebound in USDJPY up to around 153
Post-FOMC strategy thoughts Dovish Fed – high convictions in long JPY/KRW, short S$NEER, long 10y IGB; increase short CNH basket conviction; enter short THB/JPY.
KRW, IDR, AUD and NZD depreciated the most vs. USD in historical US equity bear markets; JPY, CHF, and EUR may outperform this time.
According to Nikkei' s exclusive report, the GPIF is expected to maintain its current asset weightings in its basic portfolio from FY2025, with each of the four asset classes retaining their 25% allocation. The article did not specify any changes to the allowable deviation ranges from these target weights.
Life insurance companies (lifers) net sold JPY216bn ($1.4bn) of foreign bonds inFebruary, marking net selling of foreign bonds for four consecutive months (Fig. 6 ), but the size remains smaller than in 2022, when they markedly decreased their exposure to foreign bonds.
In February 2025, Japanese investors net purchased JPY3.0trn ($19.5bn) of foreign securities (equities + long-term bonds), the largest net purchase since August 2024 (Fig. 2 ). The main contributor was net purchases of foreign bonds by pension funds and banks (Fig. 3 ).
Finally, for USD/JPY to fall strongly, we believe onshore FX players need to become more bullish on JPY buying, and it is one of the key catalysts for USD/JPY to continue falling further.
A commonly raised point is that Shunto wage increases only apply to union members, and the March preliminary results only reflect wage increases from Rengo-affiliated unions, resulting in the data being non-comprehensive. We believe this observation is half right and half wrong.
