On Monday (Oct 10), / slightly higher, temporarily traded at 145.45, up 0.05%.
According to UBS, the policy shift would boost the yen and have a big impact on bond markets where Japanese investors have large holdings, namely Australia, France and the United States.
A more extreme scenario would be to abandon yield curve control, which, while unlikely, would send Japanese stocks into a bear market and could send US and European stocks down 10 per cent, the firm said.
The dollar hit a 24-year high of 145.90 against the yen in September, prompting Japanese authorities to intervene to support the fragile currency.
Usdjpy held near 145.50, breaking a 24-year high set in late September in Asia on Monday.
The latest rise in the JPY pair could be linked to a broad rally in the US dollar, although holidays in Japan and the US pose a challenge for momentum traders.
