The latest macro data releases continued to support the view of the BoJ being in no need to ease monetary policy further. The IMF confirmed such a notion, too, by stressing that no change to the current policy stance is needed in order to reach the inflation target.
Consequently, there appears to be little room for investor expectations of falling BoJ monetary policy, which suggests that USD/JPY will mostly be driven by conditions in the US.
Accordingly, we have revised our JPY forecast profile higher. However, as further improving US growth prospects still make a case for diverging BoJ-Fed monetary policy expectations, we remain of the view that the pair will trend higher in the next few months.
Next week’s focus will be on US payrolls, which Crédit Agricole expect to beat expectations.