USD/JPY has given up over 3% since making multi-year highs near 122.00 in December, while EURJPY is down 7% from Dec highs.

In this regard, Credit Suisse argues that the sharp fall in oil prices since the last BoJ easing decision in October may force the central bank’s hand again sooner than markets expect by weighing on inflation expectations ahead of the key spring 2015 wage round – from which the BoJ is hoping to see hefty base wage rises of around 2%.

"Given that the key elements of the 2014 wage round were well understood by mid-March last year, similar timing this year would suggest the BoJ may need to move ahead of mid-March 2015 to guarantee a satisfactory outcome," CS arfues.

e-Institutional Views

"While the Credit Suisse house view is that more easing measures will be announced at the April 8 BoJ meeting, sooner than markets expect, an easing before then cannot be excluded based on recent comments by BoJ Governor Kuroda. We delve into those further in the rest of this section. Were this to happen, USDJPY would likely test June 2007 highs above the 124.00 level," CS projects.

In line with this view, CS advises in favor of buying into the risk of another BoJ policy ease in the next two months.

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