Recently, I've been watching the yen exchange rate trend, and I found that USD/JPY is still fluctuating between 152 and 160. It's almost the end of May, and the yen still hasn't shown much improvement. At the end of April, it nearly approached the 160 level, which was a bit painful.

After taking a closer look at the underlying reasons, it's mainly supported by the US-Japan interest rate differential. Although the Bank of Japan raised rates to 0.75% at the end of last year, US interest rates are higher, leading many to borrow low-interest yen to invest in dollar assets, naturally pushing the yen down. Plus, Japan's government is pursuing fiscal expansion policies, and the Middle East situation is still affecting oil prices, all of which continue to put downward pressure on the yen. Japan's economy itself isn't very strong either, with weak consumption, and the central bank is cautious about raising rates.

The key turning point should be the Bank of Japan meeting in June. If they actually raise rates to 1.0%, the US-Japan interest rate gap will narrow, and the yen might rebound a bit. However, according to institutional forecasts, JPMorgan is more pessimistic, expecting the yen to fall to 164 by the end of the year, while Societe Generale also predicts it will stay around 160. In plain terms, for the yen to truly stop falling, Japan needs internal reforms—wages and prices must enter a healthy cycle, economic growth momentum needs to improve, and only then can the yen's outlook truly change.

In the short term, the yen is likely to continue consolidating in a high range, with arbitrage trading still exerting pressure. If you have travel or forex investment needs, consider entering gradually rather than going all-in at once. Remember, central bank statements, global risk sentiment, and each country's monetary policies all influence the yen's direction, so long-term attention is necessary.