JPY & BoJ Preview - ING

FX Strategists at the Economic and Financial Analysis Division of ING Bank N.V. provided a brief overview of the upcoming BOJ monetary policy decision and its possible implication on the USD/JPY pair.

Key quotes:

“The Bank of Japan meeting this week (Tue) may command more attention than usual – not least given recent speculation that the central bank may be looking to signal a hawkish policy shift. We think that it is way too soon for any explicit change to the current policy regime, although one could easily interpret the central bank’s more upbeat outlook on the economy as a small step towards the unconventional monetary policy exit door. Given that the macro story no longer makes the JPY a go-to short, it’s all about managing expectations for Governor Kuroda this week. We wouldn’t be surprised to see a skilful display of dovish showboating in the post-meeting presser – including some pre-emptive concerns over ‘disorderly’ FX moves. This suggests USD/JPY may be supported above 110 for now – but real money buyers of yen may be looking to swoop in.”