BOJ Hike on Horizon, Yet Yen's Upside Limited

Standard Chartered analysts Chong Hoon Park and Nicholas Chia expect the Bank of Japan (BoJ) to raise its policy rate by 25bps to 1.25% at its September meeting.

The move, seen as a pre-emptive hike followed by a more patient phase of normalisation, is unlikely to cause USD/JPY to fall, according to the analysts.

They argue that the Japanese Yen's recent positives are already priced in and thus see a low bar for negative surprises on this front.

The pair is expected to return to the upper half of the 155-160 range in Q4 as a result.