In European trade on Wednesday (Oct 26), the/low recovered to trade at 148.29, up 0.28%.
Bank of America believes the weak yen is putting pressure on Japanese policymakers to exit their long-held dovish policy, but the likelihood of that happening remains low ahead of the upcoming policy meeting on Friday.
The Committee is also likely to leave unchanged its yield curve control target of 25 basis points for the 10-year yield and reiterate that it will defend this ceiling by purchasing bonds in a fixed and unlimited amount each day.
“Given the high pressure on yields and volatility, it is highly inappropriate for the BOJ to surprise with a ‘hawkish shift,’ as it would exacerbate risk aversion,” Bank of America rates and strategist Izumi Devalier and others wrote in a note to clients Tuesday.
Usd/JPY pressure: 152—–155 Support: 131–125 Fed rate hike expectations cool, the US index fell to a 3-week low, focus on the Bank of Canada decision.
