The USDJPY is trading at 108.77

The BOJ could announce at any time now.

As for the expectations,

  • the BOJ is likely to keep its policy rate unchanged at -0.10%.
  • The expectations are for the Bank of Japan to tweak it for guidance from keeping rates steady through the spring 2020 to the end of the summer or to the end of the year.
  • The FOMC decision on Wednesday is a near term uncertainty. If the Fed cuts and is more dovish, it could lead to sharp fall in the dollar (USDJPY). The ECB has already signalled it would be looking to ease in September. If the JPY should appreciate too much, it is likely to force the BOJ to cut/stimulate sooner rather than later

In addition to keeping the short term rate at -0.1%, the central bank will also

  • target the 10 year JGB yield at 0.0% (+/- 0.2%).
  • They are also likely to keep the 80 trillion yen annual pace of buying JGBs,
  • Its ETF purchases of 6T yen,and
  • Its J-REIT purchases at about 90B yen annually.