Japan's 2-year forward rate differential has reached its highest level in over 20 years, indicating a potential strengthening of the Yen due to Bank of Japan's policy normalization. However, analysts caution that if the United States imposes significant additional tariffs on China, the Yen could depreciate alongside the Renminbi. Daisuke Karakama from Mizuho Bank suggests that 2025 will be a year of preparation for a potential Yen depreciation, influenced by various factors including the behavior of inbound tourists, digital deficits, and the new NISA program. Additionally, Japan's chief currency diplomat, Kanda, is actively working to counter speculative activities affecting the Yen's value, as the currency faces pressure in the current market environment.