“No change in policy as the BOJ adopts a wait and see approach,” TD Securities analysts said previewing the Bank of Japan’s policy meeting next week.”
Key quotes
“The BOJ has the last mover advantage in following the ECB and the Fed, and should take comfort in recent yen weakening and backup in bond yields.”
“We do see a growing risk that a YCC tweak occurs in October to enhance flexibility and alleviate negative yields. This meeting could hint at an enhanced curve corridor or YCC curve rolldown.”
“USDJPY to drift in a 107/109 range in the short-term as bond markets continue to adjust from a fatalist attitude. Some risk of a punch above the range towards the 200dma but we expect this to be solid resistance. Strategically, we see value in scaling in EURJPY shorts.”
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