Citigroup Sees Dollar-Yen Bounce Ahead of BOJ Decision

Citigroup's FX strategists are recommending a dollar-yen call spread ahead of the Bank of Japan's (BOJ) rate decision. The trade positions for a rebound in dollar-yen after the yen surged on Thursday, with the dollar falling 2.5% against the yen to 159.40.

Daniel Tobon, Citigroup senior FX and macro strategist, said that Governor Kazuo Ueda is unlikely to 'outhawk' expectations at tonight's BOJ meeting, which could lead to a disappointment and lower dollar-yen prices ahead of the event.

Citigroup recommended buying the one-month dollar-yen 160.50/162 call spread, which would generate profit from a recovery in the currency pair above 160.50, with maximum gains reached at 162.