US Treasury yields remain at the core of USD/JPY fortunes, in the view of economists at HSBC. They expect the pair to inch higher in the coming weeks 

Shift in terms of trade may have contributed to some JPY weakness

“As the USD and JPY have similar risk profiles, geopolitical risk seems less likely to hit USD/JPY than other currencies unless another bout of risk aversion were to prompt a renewed drop in US yields.”

“The shift in terms of trade may have contributed to some JPY weakness, given Japan is a large net commodity importer. Perhaps the less supportive trade and current account balances leave the JPY more vulnerable to the spike in US Treasury yields.”

“Monetary policy wise, the Bank of Japan left policy unchanged on 18 March as expected. With underlying price pressures subdued, we expect policy to remain unchanged in 2022.”