USD/JPY likely to continue to trade in the recent 123 range going into 2016

Bank of Japan intended to suppliment its QQE programme qualitatively without any quantitative easing further in previous week. Governor Kuroda described the decision as supplementary adjustment despite additional easing, after the meeting's press conference.

Market reactions appear to show confusion and concerns regarding BOJ's policy communication that might continue to pressurise USD/JPY in short term as the gains after the Fed meeting are being lost.

"We believe these measures are unlikely to generate depreciation pressure for the JPY even though it may support the durability of the QQE somewhat in the future. As such, we expect USDJPY to continue to trade in the recent range around 123 going into 2016", says Barclays in a research note.