Bank of America Global Research discusses its expectations for this week's September BoJ policy meeting.
"The BoJ policy board concludes its two-day policy meeting this Thursday, 22 September, shortly after the September FOMC decision. We expect the BoJ to keep its YCC rates targets unchanged, including the +/-25bp permissible trading band. 49 out of 49 analysts surveyed by Bloomberg also expect no change.
The main focus of this meeting will be (1) the extent of changes - if any - to the policy board's forward guidance; (2) Governor Kuroda's comments on the yen and inflation outlook. On the whole, we do not expect this meeting to result in notable changes to the BoJ's policy stance," BofA notes.
"There is a risk USD/JPY will squeeze higher on continued dovish messages the BoJ is likely to deliver at the MPM. The MoF's resolve may be tested and if the MoF fails to respond, USD/JPY could overshoot to 150 quickly," BofA adds.