Societe Generale Research discusses the BoJ policy trajectory under the Ueda regime.

 

"The CFTC has had a data issue and hasn’t been updating position data but we now have figures for the end of January. Yen positioning was still short at the end of January (when USD/JPY had broken below 130). Yen buying probably wasn’t by speculators but by hedgers of foreign bond holdings. The traders aren’t convinced. Maybe the February data will see that lack of conviction in the idea of a BOP pivot translate into selling as USD/JPY has risen?

Either way, we now wait for the Ueda regime to start, and make its first move," SocGen notes. 

 

"Our team in Tokyo’s updated thoughts for  BoJ scenarios under Ueda: a very gradual tightening of monetary policy’. A widening in the trading band for JGBs to ±100bp at the June BOJ meeting would be ‘sold’ as not being policy tightening but our best guess is that the market will buy the yen anyway. But June’s a long way away and for now USD/JPY is once again responding mostly to US Treasury yields. The market has ow priced in a good but more Fed tightening than it had at the end of January but it’s unlikely to turn around until we get some softer data," SocGen adds.