We don’t expect real surprises from the BoJ policy announcement. Still, with little-to-nothing being priced in terms of a hawkish surprise, the downside risks for JPY also appear limited.

We continue to see good chances that the BoJ will make some changes to its YCC policy at the end of July – although the Fed decisions will admittedly play an important role. 

Incidentally, further USD/JPY strength (possibly driven by carry trade strategies) may well lead Japanese authorities to restart FX intervention, which was deployed around the 145 area last September.

We may not be far from the peak in USD/JPY, even though a reversal of the bullish trend may take some time.