USD/JPY generally falls heading into BOJ meetings; What about next week’s meeting? | Forexlive

Credit Agricole CIB Research sees the speculation about YCC tweaking continuing into next week’s BoJ meeting.

“While many other G10 central banks have been raising rates, the BoJ
has doggedly stuck to its ultra-loose monetary policy mix of QQE and
YCC. But as Japan’s inflation exceeded the BoJ’s 2% target, there has been speculation each BoJ meeting that it could adjust its policy. USD/JPY generally falls heading into BoJ decisions,” CACIB notes.

“This speculation was rewarded in December when the BoJ tweaked its
YCC. Investors expecting further tweaks have been disappointed, however.
Our modelling
suggests even further small tweaks to YCC would see significant USD/JPY
downside. So this speculation will not disappear,” CACIB adds.

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