MUFG Research discusses BoJ policy trajectory and maintains a strategic bearish bias on USD/JPY over the coming months.

"We discussed in more detail the potential candidates to be the next Governor (click here). Our main take away for the yen was that we expect the BoJ to abandon yield curve control regardless of who becomes the next BoJ Governor which should encourage the yen to strengthen further in the year ahead," MUFG notes.

"We continue to forecast USD/JPY moving back into the low 120.00’s, and view the recent sell-off as only a temporary setback," MUFG adds.