What if Bank of Japan stands still?

The 7 October policy statement of the Bank of Japan did not contain any hints on the possibility of more easing, but stalling inflationary pressures are probably fuelling the consensus that the central bank will act. 

"Our in-house scenario expects additional QQE measures at the next meeting on 30 October, when the BoJ will probably revise down its economic and inflation projections", says Societe Generale in a research note on Monday. 

Expectations surrounding the next BoJ meeting make the USD/JPY risk profile even more asymmetric, with more volatility ahead in the bearish case as disappointment would trigger a sharper reaction.