Japanese Yen (JPY) is under broad downside pressure in line with a modest recovery in equity markets, BBH FX analysts report. 

BOJ is unlikely to tighten the policy by more than expected

"Japan's largest labor union group, Rengo, secured a 5.46% average pay gain. That’s the highest level since 1991 and exceeded last year’s initial reading of 5.28%. Still, the pay hike was more modest than anticipated as members were asking an average wage increase of 6.09% this year."

"As such, the BOJ is unlikely to tighten the policy by more than is currently priced which is a headwind for JPY. The swaps market continues to imply less than 50bps of rate hikes over the next twelve months."