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Analysts at Nomura suggest that while USD/JPY trades within a narrow range, three policy events in the next two weeks could lead to market volatility: 1) the BOJ’s meeting on 18-19 September, 2) the 20 September LDP leadership election and 3) the summit meeting between PM Abe and President Trump likely around 25 September.

Key Quotes

“There has been low uncertainty about Japan’s economic policy, which is a key driver of the Japanese equity market and USD/JPY. Thus, these events will be crucial. Next week’s BOJ meeting and LDP leadership election are likely to show continuity in Japan’s policy stance.”

“Consequently, if the Japanese authorities can avoid trade tensions escalating, upside scope for USD/JPY is likely to be larger, as occurred after the last two summit meetings.”

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