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Forex pairs in this Article » USD/JPY (Barcelona) - The BOJ is expected to leave policy unchanged tomorrow, the six-month anniversary after the introduction of Quantitative and Qualitative Easing (QQE), notes Yujiro Goto, FX Strategists at Nomura.

Key Quotes

"Market expectations for additional easing are limited and thus, we do not expect much FX impact from today's decision. We will focus on the Bank’s economic views after the decision to hike the consumption tax with fiscal stimulus measures by Prime Minister Abe (the official forecast change is scheduled for 31 October)."

"Governor Kuroda is very likely to be very supportive of Prime Minister Abe’s decision to hike consumption tax as scheduled, and to suggest the Bank may ease when downside risks emerge after the scheduled tax hike next April."

"The BOJ has left its policy unchanged since it introduced QQE six months ago. This quietness may disappoint some investors, but most indicators suggest Japanese economic momentum is improving with better financial market conditions."

"The BOJ is still going to keep expanding its balance sheet at a record pace, amid the favorable economic and financial market environment. We view the BOJ’s silence at the moment as positive for USDJPY, sustaining JPY weakness in the medium term."
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