Bank of America Global Research discusses USD/JPY outlook and sees the pair staying around current levels before rebounding over the coming months.

We expect USD/JPY to rebound as we think the most the BoJ could deliver in 2023 would be a removal of YCC and NIRP, but not a proper hiking cycle still priced by the market, with our base case being no change. FX carry and a BoP deficit would weigh over JPY once policy uncertainty declines after the new BoJ governor comes in," BofA notes.

"We are more constructive on USD/JPY vs consensus and expect USD/JPY will rebound above 135 by 3Q23 before declining into 2024. But we think USD/JPY remains top-heavy in 1Q23 with elevated policy uncertainty," BofA adds.