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.


MAS Holds Monetary Policy Steady as Strong Growth Raises Inflation Risks
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence
South Africa Eyes ECB Repo Lines as Inflation Eases and Rate Cuts Loom
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices
Best Gold Stocks to Buy Now: AABB, GOLD, GDX
BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 



