"After the appointment of two new BOJ board members, the next big change in the
policy board is scheduled next spring: changing the governor (April) and the two
deputy governors (March)," says the Bomura research. "Political pressures on the Bank will likely be elevated approaching the nominations. An early general election, which could lead to regime change, would likely increase the pressure on the BOJ even before the nomination process begins."
The "attention on BOJ monetary policy in the FX market is likely to increase again as political pressures remain high," continue Ikeda and Goto. "We expect USDJPY to rise toward end-2012 and end-2013, but the main driver should be a rise in US yields thanks to the gradual US economic recovery and changes in Japan-oriented flow," points the Nomura team. "Although it should not be a main driver of the rise in USDJPY, elevated government pressures on the Bank support our view that USDJPY is now bottoming."