USD/JPY: Yen to remain under upward pressure going forward – MUFG

The Bank of Japan will be the last major central bank to provide a policy update this year when they announce their policy decision on Tuesday. Economists at MUFG Bank analyze how the BoJ meeting could impact the Yen.

BoJ on hold

We do not expect a BoJ policy change and the BoJ could also be cautious on making changes to the statement that fuels expectations of a hike in January. 

The BoJ probably wants maximum flexibility. However, any Yen selling from here is unlikely to last long given the bulk of the recent decline in global yields will likely hold as the global inflation declines are real.