ANZ Research previews next week's BoJ meeting and the scope for MoF intervention.

"While a hold is largely expected at next week’s BoJ meeting, the focus will be on the press conference and its updated forecasts which, in combination, may shape market pricing. An upward revision to FY26–27 inflation, would reinforce expectations of further tightening. A downgrade to growth on trade uncertainty would push in the opposite direction. Japan’s trade deficit widened this week as JPY weakness inflated the import bill. Import values rose 25% y/y in June, outpacing a 19% rise in exports. For now, the terms-of-trade drag points to softer net exports, near-term growth risks and continued pressure on the JPY," ANZ notes.

"Bottom line, the absence of intervention over the long weekend in Japan last week leaves the market with little reason not to test levels closer to 165 in USD/JPY. A sustained JPY turn would require more than verbal pushback; it would need at least a clear hawkish BoJ signal and more importantly a weaker USD," ANZ adds.