Robert Rennie, an analyst at Westpac, thinks the BoJ has the benefit yet again of being able to observe the outcome of the FoMC meeting October 29/30 before it announces policy October 30/31.

• “Over the last three weeks, we have seen some clear indications that the BoJ is gearing up for some potentially significant announcements at that meeting. The most obvious of course was the Sep 19 MPC statement which noted that the “Bank will re-examine economic & price developments at the next MPM”. In addition, BoJ member Funo suggested that a number of options are open for discussion at the “very important meeting” at the end of the month.
• This plus the fact that Japanese investors appear to be increasingly turning to unhedged foreign debt purchases adds to the idea that USD/JPY should be well supported on dips. However, we maintain our negative medium-term view on the basis that we do not expect a lasting US/ China trade agreement and expect to see increased US/ Europe trade friction in the weeks ahead. Use strength above 108.50 as an opportunity to sell.”