BoJ is the near term risk, a dovish surprise? – Scotiabank

By FXStreet FXStreet (Guatemala) – Analysts at Scotiabank note that JPY is overall slightly weaker this week, despite dollar weakness today.

Key Quotes:

“Its decline initially driven by the release of unexpectedly weak retail sales data with subsequent pressure resulting from a modest improvement in the broader tone. We look to near-term weakness in JPY on the back of an anticipated reversal of its recent haven driven gains.”

“The explicit reintroduction of a flexible Fed bias should also bolster risk appetite and pressure JPY.”

The greatest near-term risk lies with Friday’s BoJ policy decision (late pm EST), with no anticipated changes to the JPY80trn pace of asset purchases. However risk is balanced to the potential for a dovish surprise following mixed signals (official neutral, rumor-dovish) over the past week.”
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Source:: FX Street