Executive Summary
CAD/JPY trades at approximately ¥116.10 on March 11, 2026 — meaning 1 CAD buys approximately 116.10 JPY.
The pair has risen approximately 14.5% over the past year, driven by CAD's oil-price tailwind from the Iran/Hormuz shock combining with JPY's structurally weak footing from the persistent rate differential.
Elevated Middle East tensions have kept crude oil prices strongly supported along with the commodity-linked Canadian dollar, with the pair hitting a roadblock around 117.01 which aligns with a major psychological resistance. The central bilateral tension for this pair is the Iran conflict's paradoxical dual impact: it is simultaneously CAD-bullish through the oil/energy export channel and JPY-bearish through the energy import cost channel — making CAD/JPY one of the most directionally concentrated expression vehicles in G10 for the Iran trade. Against this, the BoJ's uniquely hawkish posture among G10 central banks and imminent Shunto wage results represent the primary strategic force pulling the pair lower. Our tactical stance is Neutral (weighted score +0.045, conviction 2/5) — the Iran-driven rally has extended beyond near-term sustainable levels, with the pair stalling at major technical resistance while the super-week event calendar creates binary risk. Our strategic stance is Bearish CAD/JPY (weighted score −0.213, conviction 3/5) — BoJ normalisation, converging rate differentials, and JPY's structural 22% PPP undervaluation vs CAD create a compelling downside case targeting ¥108–112 by August 2026, representing the dominant strategic opportunity for a pair that the broader market is currently running directionally long on oil-shock momentum.