Halister News

(Bloomberg) -- Bank of Japan is expected to keep policy unchanged and if the vote is unanimous, it could underscore monetary policy divergence with the U.S. and push USD/JPY higher, says Shigeki Yoshitoshi, head of Japan foreign exchange and commodities sales at Australia & New Zealand Banking Group Ltd. in Tokyo.

• BOJ’s expected decision to keep policy unchanged itself won’t be a trading factor
• Unanimous vote could provide a tailwind to USD/JPY, potentially pushing it towards 113
• NOTE: Board members Kiuchi and Sato, who were consistent dissenters, have completed their term with their last policy meeting attendance in July
  • New board members Kataoka and Suzuki vote for first time
• Markets seem to be catching up after confirming Fed’s stance for a December rate hike, as probability seen by markets is rising to around 70%
• Start of balance sheet reduction is likely to work to push yields higher
• USD/JPY may test 114 levels in the near-term and could try 115 by the end of year
• Geopolitical risks and U.S. political uncertainties are factors weighing on the dollar
• Focus from now will be on comments from senior ECB officials, with markets looking for signs of its future plan for asset buying or change in forward guidance, which may support the euro and cap the dollar

--With assistance from Chikako Mogi. To contact the reporter on this story: Daisuke Sakai in Tokyo at dsakai2@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui