Usdjpy — Fundamental Analysis

Analysis date: 2026-03-13

Influence Weights

entitytypeweightbasisconfidencelastUpdatedreferences
EV008event25%Core driver of USD/JPY; 275bp spread dominates carry trade flows; market structure phase confirms fundamentals with 0.9 trust weighthigh2026-03-13EV008,SF001,SF002,SF003
EV009event20%10Y at 4.27% is highest in months; directly feeds into carry trade calculations; Treasury supply concerns adding upward pressurehigh2026-03-13EV009,SF005,SF006,SF007
EV011event18%Acute negative terms of trade shock; 90% ME oil dependency with Hormuz blocked crushes JPY; structural weakness until strait reopenshigh2026-03-13EV011,SF011,SF012,SF013
EV015event12%At 159.38, within intervention zone (158-160); creates asymmetric downside risk; MoF rhetoric intensifyingmedium2026-03-13EV015,SF017,SF018
EV010event10%Core PCE at 3.0% keeps Fed on hold; constrains rate cuts; supports yield differentialhigh2026-03-13EV010,SF014,SF015
EV001event8%NFP -92K is significant; if sustained, could shift Fed stance; currently insufficient to pivot but growing riskhigh2026-03-13EV001,SF008,SF009
EV003event4%Potential but not imminent; BoJ may delay hike due to oil shock; market not pricing near-term BoJ actionmedium2026-03-13EV003,SF004,SF022,SF023
EV004event3%Takata dissent signals direction of travel; builds pressure for future hikes; not yet decisivehigh2026-03-13EV004,SF020,SF021

Synthesis

FieldValue
Overall Biasbullish
Confidencemedium
Time Horizon1-2 weeks
Key DriverEV008: Fed-BoJ policy divergence (275bp spread) combined with elevated US yields (EV009)
Key RiskMoF/BoJ intervention above 160 (EV015) or surprise BoJ hike at March 18-19 meeting (EV003)

Key Drivers

rankidnametypewhy
1EV008Fed-BoJ policy divergenceunified-event25%% influence weight. Core driver of USD/JPY; 275bp spread dominates carry trade flows; market structure phase confirms fundamentals with 0.9 trust weight
2EV009US yields elevatedunified-event20%% influence weight. 10Y at 4.27% is highest in months; directly feeds into carry trade calculations; Treasury supply concerns adding upward pressure
3EV011Japan oil import shockunified-event18%% influence weight. Acute negative terms of trade shock; 90% ME oil dependency with Hormuz blocked crushes JPY; structural weakness until strait reopens
4EV015MoF intervention riskunified-event12%% influence weight. At 159.38, within intervention zone (158-160); creates asymmetric downside risk; MoF rhetoric intensifying
5EV010Sticky US inflationunified-event10%% influence weight. Core PCE at 3.0% keeps Fed on hold; constrains rate cuts; supports yield differential

Scenarios

scenarioprobabilitypriceTargetkeyAssumptionkeyEvents
Base: Range-bound with upward bias50%158.50-161.00Fed holds hawkish, BoJ holds dovish, no interventionEV008,EV009,EV011
Bull: Break above 160 toward 16325%161.00-163.00Fed hawkish surprise at March FOMC, BoJ delays hike, war extendsEV008,EV009,EV010,EV014
Bear: Reversal to 155-15725%155.00-157.00MoF intervention above 160, BoJ surprise hike, Fed signals cutsEV015,EV003,EV001

Risks to View

idrisktriggerwouldChangeBiasTomonitoringSignal
R001MoF interventionUSD/JPY above 160, especially on fast moveneutral-to-bearishMoF/BoJ verbal warnings; sudden 2-3 yen drop without news
R002BoJ surprise hikeMarch 18-19 meeting delivers 25bp hikebearishCPI release, BoJ member speeches before meeting
R003Fed dovish pivotFOMC signals concern about labor marketbearishDot plot shifts; Powell emphasizes employment mandate
R004War rapid conclusionHormuz reopens within daysbearishPeace announcement; insurance costs normalize; oil price collapse
R005Risk-off intensifiesVIX spikes above 40; equity crashbearishJPY safe-haven bid dominates oil import costs

Monitoring Priorities

priorityiditemcheckFrequencynextChecktriggerCondition
1MP001BoJ March meeting (Mar 18-19)continuous2026-03-18Any rate hike or hawkish forward guidance
2MP002FOMC March meeting (Mar 18-19)continuous2026-03-18Dot plot shifts; Powell presser tone
3MP003MoF intervention rhetoricdaily2026-03-14"Appropriate measures" language; currency minister statements
4MP004USD/JPY 160 levelcontinuousongoingBreak and hold above 160 = intervention risk elevated
5MP005Hormuz Strait statusdaily2026-03-14Partial reopening = JPY relief rally; war end announcement
6MP006US weekly jobless claimsweekly2026-03-20Sustained elevation confirms labor weakness