Citigroup Sees Dollar-Yen Bounce Ahead of BOJ Rate Decision

Citigroup's FX strategists are recommending a call spread trade ahead of the Bank of Japan's rate decision, citing a potential rebound in dollar-yen.

The recommendation comes after the yen surged on Thursday, with the dollar falling 2.5% against it to 159.40.

Citigroup senior FX and macro strategist Daniel Tobon stated that he does not think Governor Kazuo Ueda will 'outhawk' expectations at tonight's BoJ meeting, which could lead to a disappointment and potentially lower dollar-yen ahead of the event.

The one-month dollar-yen 160.50/162 call spread is recommended for this trade, with profit generated from a recovery in the currency pair above 160.50 and maximum gains reached at 162.