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
