How to trade USD/JPY on Bank of Japan? Tips from banks
Bank of America Merrill Lynch: There are signs of potential bottom in the pair (bullish weekly MACD, horizontal 50-day MA), but there’s strong resistance at 103.46 (top of the daily Ichimoku Cloud). A very effective Bank of Japan’s meeting will bring USD/JPY to 106.05 (38.2% Fibo of 2011-2015 advance), while a very ineffective one will make the pair fall to 94.64 (61.8% Fibo).
Deutsche Bank: The risks are that the Bank of Japan disappoints and the yen will strengthen.
Bank of Tokyo Mitsubishi UFJ: It seems that opinions within the BOJ about the appropriate policy step differ, that’s why the regulator will keep its policy unchanged. The yen will rise in the short term. The target range for the pair is between 104.00 and 101.00.
Morgan Stanley: There are things that can may USD/JPY rise after the BOJ meeting. It will happen if the central bank manages to raise inflation expectations and reduces long-term bond purchases. However, if the overall policy remains unchanged, USD/JPY will then reverse to the downside.
Danske, Credit Suisse: BOJ won’t ease policy and USD/JPY will test support at 100.00.
Westpac: Any hints from the Bank of Japan that it has reached its QE limit will make USD/JPY slump below 100.00 moving towards 95.00/90.00.