Forex Flash: BoJ should consider APP increase to further boost USD/JPY - UBS

FXstreet.com (San Francisco) - From Mansoor Mohi-uddin, Managing Director and Head of Foreign Exchange Strategy at UBS: "In order to surprise investors now, the BoJ should consider increasing its APP to a much higher level than the government issues new bonds or to ramp up its monthly pace of Rinban purchases as it did in 1995. That would help sustain USDJPY towards the top end of its new 80-90 range - as step increases in quantitative easing would have more credibility than the central bank's current policy of incrementally increasing its asset purchases."

Mr. Mohi-uddin adds: "But if the currency pair is unable to stay in a higher 85-90 range then eventually policymakers may have to choose more radical measures including buying foreign bonds or setting formal targets for the yen."

USDJPY now exchanges at 87.75.