UBS sees equity rebalancing flows supporting USD/JPY through month end

UBS’s model projects that end-of-month institutional equity rebalancing flows will support USD/JPY through the end of April. The bank cites April’s Nikkei outperformance versus the S&P 500 as a driver that makes USD/JPY less prone to the dollar-selling pressure its model expects for other pairs. UBS characterises the signal as moderate (a +3 on its –5 to +5 scale). The implication is near-term upside support for the dollar against the yen, driven by portfolio flows rather than fundamental policy changes, which could sustain FX positioning into month-end.