Although steady policy appears to be the most likely outcome for the July policy meeting, it is widely expected to bring upgraded inflation forecasts and the market will continue to hope that the BoJ may offer some signal as to when YCC could be adjusted. Speculation of a possible tweak could allow the JPY some support ahead of the BoJ meeting this month. 

We maintain our one-month forecast of USD/JPY 142. That said, we have softened some of our JPY forecasts further out on anticipation that a policy tweak is likely to be delayed. 

USD/JPY – 1M 142.0 3M 140.0 6M 138.0 9M 135.0 12M 132.0