MUFG Research maintains the view of the BoJ abandoning yield curve control (YCC) later this year and  holds a bullish bias on the JPY.

"The yen sell-off was triggered by dovish comments from new BoJ Governor Ueda that have dampened expectations for a more immediate shift in BoJ policy as soon as the next meeting on 28th April. He said that the continuation of the current Yield Curve control (YCC) was appropriate considering current economic, inflation and financial conditions. The comment has raised the bar for further YCC adjustments later this month," MUFG notes. 

"We are still of the view though that the BoJ will abandon yield curve control this year so any yen weakness on the back of maintaining current policy settings is unlikely to prove sustainable. Furthermore with US yields having peaked out, it should help dampen upside potential for USD/JPY in the near-term with important resistance levels coming in between 135.00 and 137.00,"MUFG adds.