BoJ unlikely to deliver any surprises at April policy meeting; rising UST-JGB yield differential to weigh on yen: Commerzbank

The Bank of Japan (BoJ) is not expected to deliver any surprises at its upcoming 2-day monetary policy meeting, scheduled to be concluded on April 27, but rather a "keep going" attitude, according to the latest research report from Commerzbank.

The BoJ can actually breathe a slight sigh of relief as USD-JPY has moved away from the 105 mark and the yen has depreciated again - after all stronger yen means that reaching the inflation target of 2 percent is moving into the far distance.

Nevertheless, it is still far too early for an exit from the expansionary monetary policy. Even though speculation had arisen temporarily that the BoJ might consider an exit in particular as central bank governor Haruhiko Kuroda had commented along those lines.

Regardless of whether the BoJ is considering a possible exit - a step it will have to consider at some point - its hands are currently tied due to the weak inflation levels. Despite all speculation and hints, it will have to remain ultra-expansionary for a long time yet.

"In our view, USD/JPY is, therefore, moving in the right direction. The BoJ would simply be very clumsy if it were to revert this favorable development as a result of any comments," the report added.

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