Pressure on the BoJ to make changes is mounting. However, it is questionable whether it will give in to this pressure this week. The BoJ has proven in the past that it can surprise the markets, but it has also illustrated that it finds it very, very difficult to exit its ultra-expansionary monetary policy. I therefore think that it will leave its monetary policy unchanged on Tuesday.

If it brings itself to adjust its yield target to the upside after all that would initially be positive for the Yen, but as happened before, the effect might evaporate again quickly if the market considers it to be mainly a reaction to current conditions and less as a first step towards an exit.