Bank of America Global Research discusses its expectations for tonight BoJ policy meeting.
"After a turbulent few months reacting to COVID-19, the BoJ is likely to take a pause at its next policy meeting on 16 June. The BoJ may enhance its new COVID-19 lending facility, but it will keep its rates and risk asset purchase targets unchanged," BofA notes.
"Risk sentiment has driven JPY movement lately, most notably AUD/JPY. JPY's nominal effective rate has lost more than half of its COVID-19 gains as the global equity market has rebounded strongly. The move has been led by positioning, in our view. While the BoJ has implemented measures to provide the economy with credit and liquidity during and after the COVID-19 outbreak, it has taken a backseat in the FX market.," BofA adds.