BoJ likely to disappoint this week – BNPP

Research Team at BNP Paribas, expects the Bank of Japan to disappoint expectations for easing this week.

Key Quotes

“Our economists expect no action on the Bank’s deposit rate and no significant changes to its QE program at this meeting. However, we do not expect a steady policy call to result in sharp JPY gains, particularly about 12 hours ahead of the FOMC meeting.

This week, the most important factor driving USDJPY is likely to be the Fed decision and we continue to target USDJPY reaching 108 by the end of the year. However, if the Fed does disappoint our forecast for a hike, the combination of a steady Fed and steady BoJ policy would likely see USDJPY test back below 100.”