BoJ likely to keep its monetary policy unchanged

The BoJ (Thursday) is expected to keep its monetary policy unchanged and retain its assessment of the economy this week after it softened its calendar-based commitment to inflation and Governor Kuroda revealed his preference for "balanced" inflation at the 30 October meeting. 

"We no longer expect additional easing from the BoJ as our baseline scenario", notes Barclays.

While a policy-driven yen weakness is now unlikely, USDJPY is expected to remain rangebound around 123 in the quarters ahead, supported by expected USD strength into a Fed rate hike, ongoing recovery in risk assets, and portfolio rebalancing outflows from Japan. However, downside risks are seen from a structural slowdown in EM and uncertainty about the Fed's hiking path.