BoJ exited NIRP and YCC simultaneously and revamped its monetary policy framework around short-term interest rates. The Bank kept its QE program and signalled that it will make nimble responses to any spike in long-run interest rates. Our confidence around an October hike has lessened after Governor Ueda's dovish comments and the recent economic data.

USD/JPY is now hostage to the FOMC decision on Wednesday and any big hawkish surprise from Powell could push USD/JPY beyond its 2022 high at 151.90 which may invoke some strong verbal interventions from the MoF.