Another surprise policy change by the Bank of Japan next week it is not a high probability outcome. In the view of economists at Credit Suisse, an unchanged outcome might cause some disappointment.

Fading USD/JPY strength towards the top end of the target range at 135.00

“Ahead of next week’s BoJ rate decision, markets are aware of the risk of further possible tweaks to YCC policy, but do not seem to attribute a high probability to it.”

“While we acknowledge some potential for disappointment in the event of an unchanged policy outcome, we continue to see the USD/JPY outlook as asymmetrical to the downside, we hold on to our 125.00 Q1 target and remain committed to fading USD/JPY rallies to the top of our 120.00-135.00 target range.”