Barclays expects further upside risks to the yen regardless of the BOJ decision today

Barclays on where to for the yen on the BoJ statement due today, Wednesday 18 January 2023

BoJ meeting poses further upside risks to the JPY.

• If the BoJ decides on further YCC adjustment, we estimate that the Yen could appreciate by as much as 5%
• Even if inaction leads to a knee-jerk USD/JPY rally, expectations for revision will likely remain intact and USD/JPY could stay on a downtrend, especially amid broad USD weakness

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Ahead today is the Bank of Japan policy statement. Due in the 0230 to 0330 GMT time window (2130 - 2230 US ET).

Previews:

• TD say still plenty of room for yen gains, see as low as 120 by the end of March
• Bank of Japan preview - "may be on the verge of its biggest policy change in decades"
• The hyenas are circling the Bank of Japan
• 10-year JGB yields still pushing the limit for now
• The risks are skewed towards disappointment for yen bulls this week

• Goldman Sachs ask how low could USD/JPY fall if the BOJ exit YCC (spoiler, under 125.00)

• With the Bank of Japan ahead, what don't the USDJPY sellers want to see technically

• Why the best trade is to be long JPY into the BOJ - Deutsche Bank

• How much will USD/JPY move on today's Bank of Japan decision?

• Soc Gen will buy yen if the BOJ disappoints yen bulls - awaiting "attractive entry levels"