In the opinion of Jane Foley, senior currency strategist at Rabobank, Bank of Japan (BoJ) is unlikely to deviate from current accommodative shape as this would lead to unwanted appreciation of the yen.
Key Comments:
“For now, the BoJ will want to promote the image of a bank focused on policy stimulus. More than 60% of the economy is now in a state of emergency due to an increase in covid cases and any divergence from the accommodative paths set by the ECB and the Fed could result in an unwanted appreciation of the JPY. Any change in BoJ policy and the JGB bond curve could have an impact on the JPY“.
“Currently we hope that the USD / JPY mainly moves in the 103/104 range in the coming months“.
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