“We expect no change in BOJ policy at the upcoming meeting. The BOJ could drop signals over prospective – albeit pragmatic- policy tweaks in the coming year however,” TD Securities analysts argue.
Key quotes
“Though the CPI outlook will be revised lower, this should not preclude the BOJ from making pragmatic policy changes down the road as financial stability remains a focus. A slower Fed and ECB are notable risks to this view.”
“With limited scope for action at this meeting, we think USDJPY will remain confined to a broad 105/110 corridor. Equity repatriation and limited follow-through in US rates should keep the pair capped. Over the medium-term, JPY valuations remain attractive and continue to suggest an asymmetric profile skewed towards yen appreciation.”
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