USD/JPY: Yen has only limited appreciation potential – Commerzbank

Bank of Japan (BoJ) Board Member Toyoaki Nakamura said that it would be premature to tweak the monetary policy. Thus, economists at Commerzbank maintain a beairsh bias on the Japanase Yen.

BoJ supports JPY bears

“BoJ Board member Nakamura today once again encouraged the JPY bears (that means us too). According to his speech text, he said that the BoJ needs to continue with monetary easing persistently. He pointed out that inflation in Japan did not yet have an impact on wages. Hence, next spring's shift in wages has to be carefully monitored.”

“For the time being, we maintain that no significant turnaround in Japanese monetary policy could be expected in such an environment and therefore see the JPY with only limited appreciation potential.”