USD/JPY: Fed-BoJ Gap Widens as Tech Rally Masks Policy Risk

USD/JPY continues to reflect the structural policy gap between the Federal Reserve and the Bank of Japan, a theme that persists even as markets fixate on AI infrastructure spending and Nvidia's blowout quarter. With US rates still elevated relative to Japan's ultra-accommodative stance, the yield differential remains the dominant medium-term driver for the pair.

Nvidia's report, and the broader capex enthusiasm it has triggered across the semiconductor supply chain, is reinforcing US growth exceptionalism narratives that traders use to justify holding dollar longs against the yen.

Any hawkish surprise from the BoJ, or a dovish pivot from the Fed following incoming US data, would be the more likely trigger for a meaningful USD/JPY reversal than equity market swings alone.