Bank of Japan Accounts (April 10)

What the desk is arguing

The desk frames this as a clear indication that the BoJ is prioritizing economic stability over currency strength. The substantial holdings in government securities and the ongoing support programs reflect a strategy aimed at sustaining growth rather than curbing inflation through rate hikes.

Moreover, the BoJ's foreign currency assets stand at ¥11.69 trillion, indicating a cautious approach to currency management. This suggests that any significant appreciation of the yen may not be supported by the central bank's current policy stance, as they continue to prioritize domestic economic recovery.

Where it sits in our coverage

Our consensus target for USD/JPY is 1.075, with a range of 1.04 to 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26) - citi: 1.08 (Mar26)

This view aligns with jpmorgan, which sees a slightly higher target, while bofa presents a more bearish outlook at the lower end of the range. The desk's call is positioned near the upper bound, suggesting a potential for further yen weakness.

How other firms see it

Firms like jpmorgan and citi share a similar outlook, anticipating continued yen depreciation due to the BoJ's accommodative policies. Conversely, bofa holds a contrary view, expecting a stronger yen as global economic conditions improve.

Watch USD/JPY closely, as its trajectory will likely be influenced by upcoming economic data releases from Japan, particularly the GDP growth rate and balance of trade figures. These indicators will provide insight into the effectiveness of the BoJ's current policies and their impact on the yen.

What the calendar says

With the GDP Growth Rate and Balance of Trade data scheduled for May 19, these releases will be critical in assessing the health of the Japanese economy and the potential for any shifts in the BoJ's policy stance.