Our economists expect the BoJ to consider a more aggressive stance, irrespective of more stable risk sentiment as for instance reflected in the Nikkei rebounding above 17000.
Most importantly, downside risks to growth and inflation persist, what is also reflected in inflation expectations as measured by 5y inflation swaps remaining close to multi-year lows.
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As such our economists expect the central bank to add to its asset purchases by starting to buy Japanese blue chip equities.
Well supported central bank easing expectations, and overall relatively stable risk sentiment should ultimately push USD/JPY higher anew.