Given the risks that the US could be in recession by year-end, that the Eurozone could be stagnating in H2 and in view of the disappointing pace of China’s recovery, the window of opportunity for a policy change by the BoJ is likely to be very small and potentially non-existent. 

We expect the USD to remain firm this year. Our forecast of a move back to USD/JPY 135.00 on a six-month view assumes the BoJ have made a step towards altering YCC.