Immediate YCC change not coming but JPY weakness unlikely to prove sustainable – MUFG | Forexlive

MUFG Research maintains the view of the BoJ abandoning yield curve
control (YCC) later this year and holds a bullish bias on the JPY.

“The yen sell-off was triggered by dovish comments from new
BoJ Governor Ueda that have dampened expectations for a more immediate
shift in BoJ policy as soon as the next meeting on 28th April.
He said that the continuation of the current Yield Curve control (YCC)
was appropriate considering current economic, inflation and financial
conditions. The comment has raised the bar for further YCC adjustments
later this month,” MUFG notes.

“We are still of the view though that the BoJ will abandon
yield curve control this year so any yen weakness on the back of
maintaining current policy settings is unlikely to prove sustainable.
Furthermore with US yields having peaked out, it should help dampen
upside potential for USD/JPY in the near-term with important resistance
levels coming in between 135.00 and 137.00,”MUFG adds.

For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.