The yen remains under pressure as Middle East conflicts intensify. The Bank of Japan’s rate cut after April 2026 sits at 0.1% YES.
Middle East tensions are weighing on the yen, largely because Japan depends on oil imports. The odds for a BoJ rate cut haven’t moved. April’s market holds at a consistent 0.1% YES, unchanged from last week.
Oil disruptions matter here. With crude oil prices spiking due to the Strait of Hormuz’s closure, the probability of oil hitting $90 by June is significant. Traders are pricing in the impact on Japan’s economy. As the yen weakens, the BoJ could face pressure to intervene, though current odds for such a move remain low.
Volume is thin: $77 in actual USDC traded. It only takes $82 to move the odds 5 points, meaning a single large trade could cause a sharp swing.
A YES share at 0.1¢ offers a potential 1,000x return if the BoJ cuts rates, but you’d need strong conviction that intervention is imminent. Absent a major shift, this bet is speculative.
Watch for the upcoming U.S.-Iran talks in Islamabad and any BoJ statements. Kazuo Ueda’s remarks will signal whether any policy shift is on the table.
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