JP Morgan Research discusses BoJ rate outlook and keeps targeting USD/JPY at 164 by year-end.

"Rate-hike expectations have increased not only at the front end but also further out the curve. However, this has not translated into yen appreciation; instead, the relationship between BoJ hike expectations and JPY has become a negative correlation," JPM notes.

"Our Japan economists have revised their forecast to reflect a somewhat faster tightening pace by the BoJ, expecting the policy rate to reach 2.00% by end- 2027. However: (1) a move to 2% is already largely priced in, and (2) the negative correlation between BoJ hike expectations and JPY is likely to persist for the time being. Therefore, we think that a faster BoJ hiking path will only have a limited impact on our medium- to long-term yen-weakness view. We keep our year-end USD/JPY target unchanged at 164," JPM adds.