Bank of America Merrill Lynch Global Research discusses USD/JPY outlook and maintains a structural bearish bias

"The bar is high for the BoJ to cut the policy rate and the USD/JPY level is likely to be a key variable. We would sell USD/JPY (and vol) if it rallies on expectations for the BoJ from the current level. The likelihood of the BoJ's rate cut would increase if USD/JPY sells off to 104-105, accompanying weakness in risk assets. However, we do not think a mere 10bp rate cut would contain the pressure. We expect the market to test the BoJ in such a scenario and volatility will rise. But the combination of fiscal easing, rate cut with supplementary measures, and more purchases of foreign assets by public/semi-public institutions, may prove effective in weakening JPY," BofAML adds.