The Bank of Japan will have reservations over easing policy further at Thursday’s meeting, but will be concerned that an unchanged policy could trigger further upward pressure on the yen. Given market expectations, there is a high risk that these fears would be realised. Bold easing is certainly a possibility, which could propel USD/JPY towards the 114.00/115.00 area, but the bank may decide on more limited measures such as increased ETF buying. This would be complemented by a clear promise of additional measures in June and further cut in interest rates at the next meeting if there is no improvement in inflation ... (full story)