The Japanese yen's safe-haven properties have become ineffective amid the conflict in the Middle East, depreciating nearly 5% against the U.S. dollar in 12 months. Japan is caught in a policy dilemma. The central bank's delay in raising interest rates suppresses the exchange rate, and energy imports push up imported inflation. Finance Minister Katayama Satsuki has intervened, but the effect is subject to monetary policy. Mid-to-late March will become a key turning point, and attention will be paid to the three major variables of geography, spring wages, and central bank policy.