Deutsche Bank expects no more easing at the BoJ meeting on 15 Mar.
"The Bank likely needs to assess the effects on the NIRP. It appears that many of the roughly 10% of market participants who anticipate additional easing expect easing not through rate reductions, but with increased ETF and REIT purchases.
Meanwhile, most investors expect the BoJ to ease further in the next several months, with around equal numbers looking for a move in April, June, or July," DB adds.
"The USD/JPY is likely to remain top-heavy tomorrow if the BoJ does not ease further. In the unlikely event that the BoJ does ease further through ETF purchases and the like, and the USD/JPY rebounds to above 114, it will be a sellers' market for Japan hedgers.
We are concerned that disappointment with limited recovery in the USD/JPY, and a repeat of the previous meeting's USD/JPY downturn could greatly decrease the market's respect for BoJ policy," DB argues.
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