HSBC’s Joey Chew argues that the dollar may not trend lower against the yen as the Bank of Japan signals only one more rate hike. The pair sits near 157.25 yen today, close to HSBC’s 2026 forecast of 155.

Chew notes that intervention risk and falling oil prices could keep the yen capped in the near term. A hawkish BOJ, fiscal discipline, and capital‑flow measures are needed to lift the JPY’s fundamentals.

Meanwhile, Asian currencies show modest consolidation amid renewed Middle East tensions. U.S.‑Iran exchanges and missile strikes in the Strait of Hormuz add uncertainty, potentially tightening the greenback‑yen corridor. Investors monitor both central‑bank cues and geopolitical flashpoints.

The dollar‑yen relationship remains a barometer for monetary policy divergence and regional stability, with implications for hedgers and exporters alike.