BoJ Tone Takes Center Stage as USD/JPY Rangebound

The Japanese Yen (JPY) is trading in a relatively flat range against the US Dollar (USD), according to Scotiabank strategists Shaun Osborne and Eric Theoret. They note that USD/JPY has been stuck between 158.00 and the mid-159s.

Fundamental releases have been limited, but media reports of major banks shifting their Bank of Japan (BoJ) tightening calls to September have lifted pricing to about 20 basis points (bps). This leaves room for further upside in the near term.

The BoJ's September meeting is still priced at a relatively low 20 bps, and market participants are focused on the central bank's tone beyond that date. The strategists warn that there will be greater risk centered around the central bank's tone after the September 18 meeting.