The critical Bank of Japan (BoJ) policy decision due on Wednesday could lift the Yen as much as 5%, economists at Barclays report.

BoJ meeting poses further upside risks to the JPY

“The BoJ meeting poses further upside risks to the JPY. If the BoJ decides on further YCC adjustment, we estimate that the Yen could appreciate by as much as 5%.” 

“Even if inaction leads to a knee-jerk USD/JPY rally, expectations for revision will likely remain intact and USD/JPY could stay on a downtrend, especially amid broad USD weakness.”

See – BoJ Preview: Forecasts from eight major banks, no rush to normalize monetary policy