BoJ to expand asset purchases this month?

Risk aversion buoyed the cheap JPY (REER) over the past month thanks to Japan's current account surplus, but concerns that China's slowdown may delay the return of inflation to 2% may prompt the BoJ to expand its QQE programme this autumn, perhaps as soon as this month.  

The next BoJ meeting is scheduled for 15 September, two days before the FOMC meeting in the US. USD/JPY 1-month vol jumped to a high of 13.59 in August and is likely to stay bid near-term. Risk reversals continue to pay for JPY calls / USD puts (highest since Feb-14). Japan Q2 GDP contracted 0.4% qoq (-1.6% annualised). 

"Our economists have revised down the 2015 growth projection from 1.2% to 0.9%", says Societe Generale.