BOJ meeting Friday October 28 preview – ‘no strong indication that change is imminent’

Extract on the Bank of Japan meeting and the outlook for the yen.

It’s via the folks at eFX.

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Credit Suisse maintains a bullish bias on USD/JPY over the next few weeks.

  • “We said we weren’t inclined to fade on USDJPY strength, even though the pair is trading near our 150 target. A week later, and with quite aggressive FX intervention and a significant rally in US Treasuries in the rearview mirror, the JPY is trading less than 1% higher from the levels prevailing at the time.With no visibility on the outcome of the BOJ’s decision of this week and with no strong indications that a change is imminent beyond a shift in market expectations, we still don’t see a strong urge to take a different approach at this time,” CS notes.
  • “In the event that the BOJ does signal a change in forward guidance, a further drop down from our Q4 140 – 150 target range is possible, but far from certain, given the backdrop of already fairly high market expectations. We are also skeptical that a minor change in forward guidance would trigger a deeper or longer lasting correction, given our optimistic view of Fed tightening and the still limited prospect of a change. major shift in actual BOJ policy before the end of Governor Kuroda’s tenure in April 2023,” CS adds.

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