CIBC Research discusses USD/JPY outlook and sees the pair remains elevated in the near-term.
"It was notable that the recent BoJ policy statement included a rare FX reference. The BoJ detailed that “It is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan’s economic activity and prices.” The currency reference underlines that the BoJ is not totally immune to JPY weakness," CIBC notes.
"Although the monetary authorities are paying attention to the JPY, they are not necessarily signaling a lack of tolerance for JPY weakness, rather they are looking to avoid disorderly moves. As the BoJ signaled that 10-year JGB yields will continue to be capped UST-JGB spreads point towards USD/JPY remaining elevated," CIBC adds.