BNP Paribas expects the BoJ to leave policy on hold on Tuesday.
"While likely to take further action later in the year, particularly if the JPY begins to strengthen again, our economists suspect the central bank would prefer to observe the effects of the January measures as they play out through portfolio rebalancing channels," BNPP adds.
"EURJPY has corrected sharply higher in the aftermath of the ECB meeting, reversing some of the JPY’s notable outperformance earlier this year. We think this can extend further and remain positioned for further upside in the cross via a risk reversal," BNPP argues.
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