People have been asking me lately: can you buy Japanese yen now? To be honest, it’s quite a timely question, because the yen’s trend really has entered an interesting turning point.

Over the past six months, I’ve been paying close attention to the yen’s performance. To be frank, it’s a bit painful. From the beginning of the year until now, USD/JPY has been bouncing around repeatedly between 152 and 160, and the yen’s real effective exchange rate has even hit a new low in nearly 53 years. The reasons behind it are actually quite complex, but they boil down to a few major structural issues.

First, the interest-rate differential between the U.S. and Japan has been widening. Although the Bank of Japan has been raising rates for the past two years, it’s still raising them too slowly. Interest rates in the U.S. are much higher, which has led to a large amount of capital carrying out arbitrage trades—borrowing Japanese yen to invest in U.S. dollar assets, and this arbitrage game continues. As long as the interest-rate gap remains, it’s hard for the yen to rebound.

Second, Japan’s domestic economic fundamentals are also not very optimistic. The new government that took office last October rolled out large-scale fiscal stimulus to boost the economy, but that has also brought concerns about debt. On top of that, consumption in Japan has been consistently weak, and import inflation is pushing up prices—indirectly weighing on the yen.

Another factor you can’t ignore is the situation in the Middle East. Japan is highly dependent on Middle Eastern oil imports, and the closure of the Strait of Hormuz directly affects energy security. Although Japan has strategic reserves, as long as oil prices stay high, import costs will keep rising, and the trade deficit will also expand.

But there’s a key turning point worth focusing on here. In December, the Bank of Japan raised its policy interest rate to 0.75%, the highest level since 1995. The market’s focus has now shifted to the June meeting—reportedly, there’s about a 76% chance the Bank of Japan will further raise rates to 1.0% in June. If it happens, the interest-rate differential between the U.S. and Japan will start to narrow, which is an important support for the yen.

I’ve looked at some institutional forecasts. JPMorgan is more pessimistic and believes the yen could fall to 164 by the end of the year. Société Générale expects it to be around 160. But regardless, these forecasts are all based on one premise—the pace of the Bank of Japan’s rate hikes and the policy direction of the Federal Reserve.

So, in the end, can you buy Japanese yen now? My view is that in the short term, the yen will still trade within this range, repeatedly testing between 152 and 158. But in the long run, what truly can change the yen’s trend is Japan’s internal structural reforms. Only when economic growth momentum genuinely improves and a healthy cycle forms between wages and prices can the yen build a truly strong foundation.

If you’re looking to prepare for future travel or spending in Japan, you might consider buying in batches. But if you’re trying to trade for profit in the foreign exchange market, you need to be even more cautious. You should always keep an eye on the Bank of Japan’s latest statements, changes in economic data, and shifts in global risk sentiment. The risk of unwinding carry trades isn’t small—back in July, an unexpectedly large rate hike triggered a massive unwind, which led to turbulence in global financial markets.

Overall, the story of the yen isn’t over yet. The next June central bank meeting, the Federal Reserve’s rate-cut timeline, and developments in the Middle East will all become key variables. If you want to genuinely seize opportunities to invest in the yen, you still need to do your homework—understand the logic behind it, rather than blindly follow the crowd.