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Citing four sources familiar with the Bank of Japan (BOJ) thinking, Reuters reported that the Japanese central bank is likely to maintain its view that the economy will gradually recover later this year from the coronavirus pandemic impact.

Key takeaways

“The economic views will heighten the chances the central bank will keep monetary policy steady at its rate review on July 14-15.”

“The BOJ’s report is expected to warn that risks to the outlook are extremely high, including the second wave of infections that could delay any recovery in global and Japanese growth.”

Separately, Japanese Economy Minister Yasutoshi Nishimura said earlier today that they agreed with virus experts to expand the economic activity further on July 10.

Market reaction

USD/JPY has trimmed gains to trade around 107.60, having hit a daily high of 107.78 in early Asia. Broad US dollar weakness outweighs the broad risk-on market mood.

Meanwhile, the above report seems to put a bid under the yen.