USD/JPY: A surprise decision to adjust YCC would trigger a powerful rally for the Yen – MUFG

FXStreet Insights Team FXStreet

The JPY re-weakened over the past week. Economists at MUFG Bank analyze USD/JPY ahead of the BoJ meeting.

JPY risk skewed to a bigger gain than a loss on an unchanged YCC announcement

We admit that our conviction on a change to YCC is lower although we still cannot rule out a move given the inevitable surprise likely involved in shifting away from YCC.

Our current end-Q3 of 136.00 incorporated our view of a YCC change and implies a big drop on a surprise YCC change.

The JPY risk is certainly now skewed to a bigger JPY gain than a JPY loss on an unchanged YCC announcement.

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FXStreet Insights Team

FXStreet

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